RHB Investment Bank Bhd (RHB Research) maintains its recommendation for short positions on the Hang Seng Index Futures (HSIF) as the index experienced a fresh correction on Thursday, retreating 125 points to close at 19,589. The index opened at 19,713, traded within a narrow range between 19,787 and 19,554, before settling at its close. The HSIF recovered 12 points in the evening session and was last traded at 19,601.
Momentum remains weak as the RSI continues to move sideways below the 50% mark. This suggests that the index is likely to maintain its sideways movement in the short term. Overhead resistance from the 20-day and 50-day SMA lines, coupled with the 20,000-point resistance level, is expected to cap any potential rebound. Following the current consolidation phase, the HSIF is anticipated to resume its downward trajectory, with the next support level identified at 19,000 points.
RHB Research advises traders to retain short positions initiated on Oct 9 at the close of 20,628 points. To mitigate trading risks, the stop-loss level is maintained at 21,250 points. Key support levels are set at 19,000 and 18,000 points, while resistance levels are identified at 20,000 and 21,250 points.
The overall bearish setup remains intact, signalling further downside risks for the HSIF in the coming sessions.
