Hang Seng Index (HSI) Technical Comments

Personal View on Hang Seng Index

Trendlines Analysis and Fibonacci retracement

Hang seng index started the great run from end August to peak around 32000 points in mid October. Subsequent to that, HSI corrected and broken the two lower trend lines and based on what we can see it is moving sideways at the moment. Near term support would be the recent low in mid November of 25893 and after that next support level would be around 24283. These two support levels also near to Fibonacci retracement support levels of 50% and 61.8% at 25701 and 24194.

Moving averages

Based on recent pullback, the 100 exponential moving averages EMA (red line) of HSI has provided good support level. If this is broken, 200EMA should provide very strong support as we have seen that during the August correction.

Potential head and shoulder?

For new uptrend to resume, HSI needs to move back up above 28871 and stabilize above this level before taking out 29962 and the recent high of 31958. This may not be an easy feat in the near term. It will take sometime to rebuild the stronger upward momentum.

Mixed signals indicate range bound with upward bias

Parabolic SAR - negative but getting close to turning positive

Moving averages - 13EMA below 26EMA - negative

MACD - forming higher lows and getting close to turning positive - potential signal that selling pressure is easing

What to watch out for :

1. HSI do not fall below 100EMA in the near term after that next strong support is at 200EMA. Since I can see that HSI is still very far away from 200EMA, this means that the uptrend should be intact at the moment.
2. Support levels at 25893 and 24283 should not be broken.

by Rooney Yong