Hang Seng Index (HSI IND)


The index has broken above the 250-week moving average (purple line), which is a positive signal. The weekly RSI is standing above its neutral level at 50% and is heading upwards. The MACD is above its signal line and 0-level, while the MACD histogram is broadening up. However, the index is still capped by the key resistance at its previous top at 26,782, the neckline of a head-and shoulder (H&S) pattern (pink line) and the lower boundary of a triangle pattern (blue line).
Hence, a short-term consolidation cannot be ruled out. We see the index trading between 24,029 (previous low)
and 26,782 (previous top).

Investors can make long entry during consolidation and use 24,029 (previous low) as a stop to control risk

Support: 24,029 (previous low), 23,124 (around long-term bullish trendline).
Resistance: 26,782 (previous top + around the H&S neckline + around the lower boundary of a triangle pattern),
28,000 (right shoulder of the former H&S pattern).

Joyce Chan, CMT, CFTe

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