The Hang Seng Index Futures rebounded for the third consecutive session last Friday, and climbed 2 pts to close at 19,800 pts – with an eye towards a close above the 20,000-pt level.
RHB Retail Research, in a note today (May 2), said the HKED opened at 19,764 pts. At one point, it rose to the day’s high of 20,135 pts but pulled back in the afternoon to close at 19,800 pts.
The index was seen testing the 50-day SMA line overhead resistance.
For the past month, the 50-day SMA line has been trending lower and exerting pressure on the index. If the HSIF pushes above the medium-term moving average line, this would indicate that the bulls are gaining strength.
However, strong resistance is likely to emerge at 20,500 pts and 20,800 pts. As long as the stop-loss point remains intact, RHB sticks to a negative bias. Traders should maintain the short positions initiated at the close of 24 Apr ie 19,924 pts.
To manage the trading risks, the initial stop-loss is fixed at 20,800 pts.
The immediate support is at 19,500 pts, followed by 19,000 pts. Towards the upside, the first resistance is pegged at 20,500 pts, followed by 20,800 pts.
