The Hang Seng Index Futures fell below the 20-day SMA line, retreating 380 pts and closing at 18,677 pts.
RHB Retail Research, in a note today (July 25), said initially, the index opened at 19,060 pts. After touching the 19,109-pt intraday high, it plunged to the intraday low at 18,545 pts and closed at 18,677 pts – breaching the 18,861-pt support.
However, in the evening, the index staged a strong rebound, climbing 512 pts and last traded at 19,189 pts.
The bearish breakout confirms that the positive momentum has switched – the index should extend the downward movement towards 18,300 pts, followed by the 18,000-pt support.
Despite the index jumping higher during the evening session, it has yet to cross above the 19,500-pt resistance. Since the index has breached the stop-loss point, RHB reverts to a bearish trading bias.
RHB has closed out the long positions initiated at 19,396 pts (13 Jul’s close) after the stop-loss at 18,861 pts was triggered. Conversely, initiate short positions at the close of 24 Jul, ie, 18,677 pts.
To manage the trading risks, the initial stop-loss is fixed at 19,500 pts. The immediate support is marked at 18,300 pts, followed by 18,000 pts. Meanwhile, the immediate resistance is revised to 19,250 pts, followed by 19,500 pts.
