Market News & Analysis
Featured Trade (HK Stock): Sun Hung Kai Properties bearish signals at major resistance
Kelvin Wong February 28, 2019 8:58 AM
Medium-term technical outlook (1-3 weeks) on Sun Hung Kai Properties (HKG: 0016)
click to enlarge charts
Key technical elements
- Hong Kong properties stocks are the leading pack that propel that on-going recovery seen in the Hong Kong stock market since Oct 2018. The Hang Seng Properties Index has rallied by 26% from Oct 2018 versus a gain of 18% seen on the broader benchmark Hang Seng Index on a closing price basis. Sung Hung Kai Properties is a major property developer in Hong Kong.
- The on-going rally of 35% from the share price of Sung Hung Kai Properties from its 25 Oct 2018 low of 99.50 to 21 Feb 2019 high of 135.30 has reached a major resistance zone at 137.60/134.70 which is defined by the upper boundary of the long-term secular “Symmetrical Triangle” in motion since Jan 2008 swing high and a Fibonacci retracement/expansion cluster (see weekly chart).
- The recent up move from 25 Jan 2019 has been accompanied by a declining volume, price action has formed a daily “Bearish Engulfing” candlestick pattern on 25 Feb 2019 right below the 137.60/134.70 major resistance. In addition, the daily RSI oscillator has broken below a significant trendline support in place since 18 Oct 2018 (similar the start of the on-going recovery seen in the price action) after a bearish divergence signal being flashed out at its overbought region.
- The next significant medium-term support rests at 117.70/115.40 which is defined by the former swing high areas of 14-21 Sep/07-20 Dec 2018, the ascending trendline from 12 Nov 2018 low and the 50% Fibonacci retracement of the entire on-going recovery from 25 Oct 2018 low to 21 Feb 2019 high.
Key Levels (1 to 3 weeks)
Immediate resistance: 134.70
Pivot (key resistance): 137.60
Supports: 126.85 & 117.70/115.40
Next resistance: 147.00
If the 137.60 key medium-term pivotal resistance is not surpassed, Sun Hung Kai Properties is likely to stage a potential multi-week down move to target 126.85 follow by 117.70/115.40 next.
However, a clearance above 137.60 invalidates the bearish scenario for an extension of the recovery towards the next resistance at 147.00 (major swing high of Nov 2010).
Charts are from eSignal
From time to time, GAIN Capital Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.