Hang Seng Index (HSI IND)
Outlook:
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).
Strategy:
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).
Analyst
Joyce Chan, CMT, CFTe
