Hang Seng Index (HSI IND)
The index posted a false breakout of the upper boundary (26,782) of our previous set range and has broken below
the lower boundary of a long-term triangle pattern (blue line). In addition, the index is still capped by the neckline
of a former H&S shoulder (pink line). Although the 250-week (purple line: 26,070) moving average is still playing
a support role, we expect the index to continue its consolidation, and a downward breakout of 250-week
moving average cannot be ruled out. The weekly RSI is turning down, while the MACD histogram is also
narrowing down. In these perspectives, a further consolidation is likely but we are not very bearish. This index is likely to continue moving sideways but move up the lower range to 24,970,and increase the upper range to 27,040 (previous top).
Investors can make long entry during consolidation and use 24,970 as stop-loss to control risk.
Support: 26,070 (250-week MA), 24,970 (Oct 23 week top), 24,029 (previous low).
Resistance: 27,040 (previous top + around H&S neckline), 28,000 (right shoulder of former H&S pattern).
Joyce Chan, CMT, CFTe