HSI Futures: Strong Rebound In Play; Eyeing To Reclaim 22,000 Level

The HSIF underwent a strong rebound yesterday as market sentiment improved. The index opened flat at 21,281 points. After printing the day’s low of 21,087 points, it rebounded to test the day’s high of 21,704 points before closing in positive territory.

In the evening, the index retraced 72 points and last traded at 21,609 points. Thursday’s session was the first bullish candlestick charted so far this week. There is a possibility that the index might close the week in positive territory if the momentum follows through on Friday. Note that that recent correction picked up pace when the HISF fell below the 22,000-point level.

The bulls may climb above the 20-day SMA line and breach the 22,000-point resistance. If the bullish breakout happens, this may negate the current bearish setup and lead the index back into an upward trajectory. Before this happens, strong selling pressure still exists near the 20-day SMA line. Hence RHB Retail Research will maintain a negative trading bias until the index climbs above the 22,000-point psychological resistance.

Traders should stick to the short positions initiated at 21,643 points (3 Feb’s close). To manage the trading risks, the stop-loss has been revised to 22,000 points from 22,370 points.

The immediate support remains at 20,857 points (5 Jan’s low), followed by 20,000 points. Conversely, the immediate resistance is now at 22,000 points, then 22,370 points or the high of 2 Feb.

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