Hong Kong Stocks Attempting To Stage a Rebound

The Hang Seng index Futures (HSIF) formed a bullish candlestick during Wednesday’s session despite facing selling pressure. The index initially opened weaker at 19,246 pts, but manage to climb to the day’s high of 19,780 pts and closed at 19,602 pts.

In the evening, the index retreated 372 pts and last traded at 19,230 pts.

RHB Retail Research, in a note today (March 16) said although Wednesday’s closing price was higher than the opening price, but it remained lower than Monday’s close of 19,627 pts.

The latest “lower close” (compared to Monday’s session) showed that sentiment remains cautious and the bearish setup remains valid. In the event the selling pressure increases, expect the index to pull back to test the 19,000-pt level.

Meanwhile, should the index manage to jump above the 20,000-pt resistance, this may indicate an early sign of the trend changing. For now, the chart shows momentum remains weak and resistance stays intact.

Hence, RHB is keeping to the negative bias. Traders should stick with the short positions initiated at 21,643 pts (3 Feb’s close).

To manage the trading risks, the trailing stop is fixed at 20,750 pts.

The immediate support is kept at 19,000 pts, followed by 18,527 pts (Dec 2022’s monthly low). Towards the upside, the immediate resistance is set at 20,000 pts, followed by 20,750 pts.

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