My last 2 post about Hong Kong Hang Seng Index was first written on July 17, while Hang Seng Index was trading near the key support area at 21,000. Technical analysis was very amazing to detect this key support and indeed Hang Seng traded higher this week.
Next, I was expecting Hang Seng to swing sideway on July 21.
But now, Hong Kong Hang Seng Index hit a 50d MA resistance and also very near to the 100d MA resistance. You can definitely expect some price action around this area.
Where will Hang Seng head to next coming week?
Based on the technical analysis, we observed a higher high formation on the HSI recent price trend. Hang Seng hit this 50d MA (And near 100d MA) resistance and there is high probability that it is doing some correction now. We comfirm this using the MacD histogram that we are seeing a peak formed on the MacD histogram and now trending dowawards (You can see this as a red histogram was formed on the MacD). We also observed that RSI is near the overbought region.
Does that mean that it may end the bear trend started in May. We can’t comfirm at the moment unless we see a higher low formation to end the current correction which must be higher than 21,000.
ADX also suggest no major trend at the moment and therefore this correction can stil remain in the sideway swing.
I also looked at the weekly trend of Hang Seng Index as well, interestingly, I observed a possible descending triangle in formation. If this formation is true, it suggests a big bear in waiting if the support at 21,000 gives way.
So, I would be very cautious short term. Do not open Long position on Hang Seng at the moment unless we see a higher low formation and that can be a good entry point for Long. Otherwise, the break down at the 21,000 can be an attractive entry point to short Hang Seng.
DISCLAIMER: This information is used for learning purposes only. It does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.
