Hong Kong Hang Seng Index Hitting Critical Support – Do you think it will form a new year low?

Do you still remember my last post about Hong Kong Hang Seng Index stock market trends? I posted at the beginning of the week and I cautioned that Hong Kong Hang Seng Index may test the year low support at 21,000.

Now, HK Hang Seng Index is trading the year low support of 21,000 level now.

Let’s look at some indicator performance of HSI now!

1. McaD formed a bearish cross over end of last week and now the outlook is still bearish.
2. Separation between -DI and +DI is getting wider, suggesting the bear is getting the strength. ADX is also gearing up the momentum as well, if ADX is able to cross the 20 level mark and that will suggest a bearish trending formation. If that’s the case, it is likely that HSI can break down on the 21,000 level support.
3. RSI is near the oversold region. However, RSI can remain in the oversold region for a long time during a trending market.
4. HSI price action is now below all the 20d, 50d MA, shoing a down trend symptom. If 20d MA cross down again and separate from the 50d MA, that’s another sign of a possible down trend.

The market is now surrounded by lots of negative news, Shanghai index has just drop to a 17 months low, US inflation has just reach a 17 years high as well. What a coincidence to have 17 here Plus, the concern of the financial sector remains.

Though there is saying that oil price has eased and USD is appreciating, but, I think it is still too early to tell until we seeing some confirmation of the trend reversal, otherwise, oil price can just take a break now and USD is just have a technical rebound.

So, meanwhile, I would say bear is winning the bull 60:40 bet now. If HSI breaks the year low of March, it can also possibly drag down the regional market as well, partcularly Singapore. Singapore market follows very closely with US and HK markets.

Let’s monitor to see if another new year low will be formed on Hong Kong Hang Seng Index.

Hong Kong Hang Seng Index Stock Market Trends Aug 14, 2008

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.

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