Bulls and Bears Exerting Equal Force, HSI Futures in Consolidation Stage

RHB Retail Research has reiterated its long positions on HSI futures

Yesterday, the HSIF extended its consolidation, moving sideways and closing at 21,710 points. The index started off Wednesday’s session at 21,627 points, after which it oscillated between 21,776 points and 21,460 points before closing in 21,710 points.

In the evening session, the index fell 179 points and last traded at 21,531 points. The price action showed both the bulls and bears were of equal strength. At this stage, we have yet to see any bearish reversal sign. Hence, it is believed the index will experience a horizontal movement or shallow retracement towards the 20-day SMA line.

As long as it stays above the short-term moving average line, the bullish setup will remain valid. Consequently, the research house is keeping to its bullish bias.

Traders are advised to retain the long positions initiated at 18,617 points (30 Nov’s close). To manage the downside risks, the stop-loss threshold is set at 20,857 points.

The immediate support is kept at 20,857 points – 5 Jan’s low – followed by 20,000 points. On the other hand, the immediate resistance is still pegged at 22,000 points, followed by 22,500 points.

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