MONTHLY TECHNICAL INDICES – HSI

Hang Seng Index (HSI IND)

Outlook:
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).

Strategy:
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).

Analyst
Joyce Chan, CMT, CFTe

MONTHLY TECHNICAL INDICES – HSI

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

MONTHLY TECHNICAL INDICES – HSI

Hang Seng Index (HSI IND)

Outlook:
The index hit our first downside target at 23,484 and rebounded from the long-term bullish trendline (orange line, formed since 2008). The weekly RSI is turning up below its neutrality level at 50%. The MACD is flat, indicating downside momentum is weakening. However, there have been a few resistances on the upside, which should limit upside potential. The lower boundary of the triangle pattern (blue line, formed since Dec 16), neckline of the head and shoulders pattern (pink line), 250-week (purple line) moving average and previous top at 25,847
would play key resistance roles on the upside. Based on the above mentioned, we expect the index to move sideways between the previous low of 23,124 and previous top at 25,847 in the coming weeks.


Strategy:
Investors can make a long entry now and sell when the index is near the previous top at 25,847. Use 23,124 (previous low) as a stop to control risk.
Support: 23,124 (previous low + around LT bullish trendline) and 21,659 (overlapped area since 2014).
Resistance: 25,847 (previous top), 250-week moving average (around 25,849), 26,782 (July 20 top).
Analyst
Joyce Chan, CMT, CFTe

MONTHLY TECHNICAL INDICES – HSI

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

Monthly Regional Stock Indices Outlook

Outlook:
The FSSTI index is in a bearish trend as it is trading below the cloud. However, it is currently in a correction mode, rebounding from the base low at 2,208. The FSSTI index just broke out from a continuation pattern of
the pennant chart pattern, and we are likely to see the index continuing its rebound towards the chart pattern target of 2,960 (which also coincides with the gap resistance). The RSI is rising above its neutral level and
there is a bullish MACD crossover. Both momentum indicators could suggest potential upside in the near term.
Strategy:
Investors could sell on rally towards the chart pattern
target at 2,960 as the overall trend is still bearish.
Support: 2,750 / 2,490
Resistance: 2,960 / 3,090
Analyst
Wong Shueh Ting, CFTe

Outlook
The index has rebounded from the long-term bullish trendline (formed since 2008) again and has broken above its previous top at 24,855. The weekly RSI is heading upwards and is challenging its neutral level at 50%. The weekly MACD has just crossed above its signal line, indicating that the Hang Seng Index is likely to see further upside in the medium term.
However, the index is now very close to its 250-week moving average (purple line) which had been tested eight times since 2018 before the HSI broke downward in 2020. In addition, the 26,000 level (around the neckline of a former head-and-shoulder pattern) is another resistance level. Based on these, we are neutral but tend to positive. We expect the index to range between support at 23,484 and resistance at 26,000 in the coming weeks. Only a break below the long-term bullish trendline (around 22,519) would turn the outlook to negative.
Strategy:
Investors are recommended to accumulate stocks during any
consolidation and use the long-term bullish trendline (since 2008)
to control risk.
Support: 23,484 (overlapped level since Mar 20); bullish trendline
since 2008 (around 22,519); 21,139 (Mar 20 low)
Resistance: 25,679 (250-week moving average; purple line),
26,000 (around neckline of head-and-shoulder pattern).
Analyst
Joyce Chan, CMT

Outlook:
Based on the weekly Ichimoku chart, the FBMKLCI is still trading below the cloud, which indicates a bearish trend. In the short to medium term, the index has started to form higher highs and higher lows, and penetrated the
downtrend line to close higher at 1,556.33 last Friday. This is because most of the volumes traded came from retail players who entered the market during the MCO period. The RSI is currently above the 50 line, with bullish crossovers in both the MACD and DMI. Moving forward, we expect the index to continue in its bullish momentum if it penetrates above the Ichimoku cloud and remains above the psychological 1,600 level
Strategy:
Traders can ride the trend with a short-term target at the
1,600 psychological level, but if the short-term uptrend
line is broken, investors may turn short. As such,
investors should approach the market cautiously for now.
Support: 1,500/ 1,555
Resistance: 1,430 / 1,460
Analyst
Mohd Fakhrul Asyraq Bin Mohd Aluwi, MSTA, CFTe