Hang Seng Index Futures: Strong Rebound From The 20-Day SMA Line

Despite facing selling pressure, the HSIF staged a strong rebound from the 20-day SMA line – climbing 212 pts to close higher at 16,148 pts. The index began Wednesday’s session at 15,700 pts.

RHB Retail Research in a note today (Feb 15) said initially, it fell to the 15,456 pts day’s low but managed to recouped the intraday losses and rose to the 15,940 pts day’s high before the close.

In the evening, it added 6 pts and last traded at 15,931 pts. The latest positive price action, coupled with the RSI crossing above the 50% threshold, suggest that the bullish momentum is gaining pace.

In the event the bullish momentum follows through, the index will climb above the 50-day SMA line and test the 16,400 pts resistance. Breaching the 16,400 pts resistance will improve the market sentiment.

However, we believe strong resistance will emerge at the 17,000-pt level. As long as the index stays below the 17,000-pt level, the bears still have the upper hand. For now, we will hold on to negative trading bias.

Traders should hold on short positions initiated at 16,253 pts (the close of 8 Jan). To manage the trading risks, the stoploss threshold is placed at 17,000 pts.

The immediate support remains unchanged at 15,500 pts, followed by 15,000 pts. Conversely, the immediate resistance
is still pegged at 16,400 pts, followed by 17,000 pts

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