Hang Seng Index (HSI IND)
Outlook:
The index failed to break above the 50-week (blue line) and 250-week (purple line) moving averages. In addition, the index broke below a short-term bullish trendline and the 20-week moving average (red line). The lower boundary of a triangle pattern (since Dec 16) is playing a
resistance role. The weekly RSI is turning down and is below its neutral level at 50%. The MACD is below the 0-level, while the MACD histogram is narrowing down. We expect the index to continue to consolidate and test the next support at around 23,484 or even 22,519 (May 20 low)
Strategy:
Investors should wait for further consolidation and accumulate at 22,519-23,484 and use 21,139 (Mar 20 low) as a stop to control risk.
Support: 23,484 (overlapped horizontal level since Mar 20) and 22,519 (May 20 low).
Resistance: 250-week moving average (around 25,819), 25,847 (previous top).
Analyst
Joyce Chan, CMT, CFTe
