Chart of the day - Hang Seng potential short-term recovery in progress

Short-term technical outlook on Hong Kong 50 Index (Tues, 13 Feb)



Key technical elements

  • The daily RSI oscillator has tested and exited from its oversold region at the 30% which indicates that the 13% decline from its recent high of 29 Jan 2018 is being overextended where a potential short-term mean reversion rebound/recovery may take shape at this juncture.
  • Then key short-term support rests at 29400 which is defined by yesterday, 12 Feb Asian session low that was tested and held in the U.S. session on the same day as well as the 61.8% Fibonacci retracement of the current up move from last Fri, 09 Feb 2018 U.S. session low.
  • The next significant near-term resistances stands at 3760 follow by 31280/400 (descending trendline from 29 Jan 2018, the minor swing high area of 07Feb 2017 & the 50% Fibonacci retracement of the steep decline from 29 Jan 2018 to 09 Feb U.S. session low).

Key Levels (1 to 3 days)

Intermediate support: 29750

Pivot (key support): 29400

Resistances: 3760 & 31280/400

Next supports: 29070 & 28600 (upper limit of a major support zone).

Conclusion

The on-going up move from last Friday 09 Feb  U.S. session low of 29072 seem to have room for further potential upside. As long as the 29400 key short-term pivotal support holds, the Index is likely to shape at least a potential short-term recovery to retest the near-term resistances of 3760 and 31280/400 next.

On the other hand, failure to hold above 29400 should negate the recovery scenario to a slide to retest last Friday, 09 Feb low of 29070. A break below 29070 is likely to open up scope for a further corrective decline towards the upper limit of a major support zone at 28600 (38.2% Fibonacci retracement of the up move from 28 Dec 2016 low to 29 Jan 2018 high & the former major swing high area of Apr/May 2015).

Charts are from City Index Advantage TraderPro 


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