Hang Seng Index Futures : Bears In Control

The HSIF experienced strong selling pressure yesterday – it fell below the 18,200-pt support level to close at 18,126 pts.

RHB Retail Research in a note today (May 31) said the index started Thursday’s session at 18,425 pts. After touching the session’s high of 18,459 pts, it plunged to the 18,093-pt low before closing at 18,126 pts.

In the evening, it recouped 248 pts and was last traded at 18,374 pts. The bearish breakout at the 18,200-pt support level shows that the bears are now in control.

RHB expected the negative price action to continue towards 17,500 pts. Despite the index staging a rebound during the evening session, it may not be strong enough to rise above the 20-day SMA line.

The short-term moving average line is now acting as a resistance. As the stop-loss point was triggered, they shifted to a bearish trading bias.

RHB closed out the long positions initiated at the close of 25 Apr (17,342 pts), after the stop-loss at 18,200 pts was triggered. Conversely, they initiated short position at the close of 30 May (18,126 pts).

To manage the trading risks, the stop-loss threshold is placed at 19,000 pts. Following the bearish breakout, the first support is revised to 17,500 pts, followed by 17,000 pts. The first resistance is pegged at 18,500 pts, followed by 19,000 pts.

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