RHB Investment Bank Bhd (RHB Research) is maintaining long positions on Hang Seng Index Futures (HSIF), viewing the latest pullback as a consolidation phase rather than a reversal of the broader uptrend.
The HSIF retreated 324 points on Monday to close at 25,336 points after opening at 25,651 points. It climbed to an intraday high of 25,766 points before easing to a low of 25,321 points.
The index ended the session with a bearish candlestick, suggesting selling pressure emerged after the early advance. It fell another 82 points during the evening session to last trade at 25,254 points.
Despite the weakness, RHB Research said the broader bullish structure remains intact, with the Relative Strength Index (RSI) still holding above the 50% level despite edging lower.
The 20-day and 50-day simple moving average lines are also continuing to trend higher, reinforcing the prevailing uptrend.
RHB Research said the pullback would remain a consolidation within the uptrend as long as the HSIF stays above the 24,600-point support.
Following the consolidation, the research house expects the index could attract renewed dip-buying interest towards the 26,350-point resistance, with the next resistance at 26,750 points.
RHB Research therefore maintains a positive trading bias and recommends traders keep the long positions initiated at 24,657 points on July 15.
For risk management, the stop-loss level has been set at 24,600 points. Immediate support is identified at 25,000 points, followed by 24,600 points.
