Short-term technical outlook on Hang Seng Index/Hong Kong 50 (Fri 17 May)
click to enlarge charts
Key technical elements
- Despite yesterday’s positive moves seen in the key U.S. benchmark stock indices; the S&P 500 & the Nasdaq rallied by 0.8% to 1%, the Hong Kong 50 Index (proxy for the Hang Seng Index futures) had failed to have a positive follow through in today’s early Asian session.
- Its 3-weeks of down move that has started on 03 May 2019 is not showing any clear signs of bearish exhaustion yet as the daily RSI oscillator still has further room to manoeuvre to the downside before it reaches an extreme oversold level of 21. Click here for a recap on the medium-term outlook.
- In the short-term time frame (1-hour chart), the Index has staged a bearish breakdown from a “flag” configuration with intermediate resistance now at 28200.
- The shorter-term hourly Stochastic oscillator has reached its oversold region where the Index may shape a minor bounce at this juncture to retest 28200 before another potential downleg materialises.
- The next significant near-term support rests at 27440 which is defined by Fibonacci retracement/expansion cluster).
- The key short-term pivotal resistance stands at 29500 which is defined by the minor swing high seen in yesterday, 16 May U.S. session and the upper boundary of a minor descending channel from 03 May 2019 high.
Key Levels (1 to 3 days)
Intermediate resistance: 28200
Pivot (key resistance): 28500
Supports: 27440 & 27290/100
Next resistance: 29500 (medium-term pivot)
If the 28500 key short-term pivotal resistance is not surpassed, the Index is likely to shape another potential impulsive downleg to target the next support at 27440.
However, a break with an hourly close above 28500 negates the bearish tone for a continuation of the corrective rebound sequence towards the 29500 key medium-term pivotal resistance
Charts are from City Index Advantage TraderPro
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.