Featured Trade (HK Stock): Sun Hung Kai Properties downtrend remains intact

Medium-term downtrend remains intact for Sun Hung Kai Properties with key resistance at 121.50

Medium-term technical outlook (1-3 weeks) on Sun Hung Kai Properties (HKG 0016)



Key technical elements

  • Since its recent low of 109.70 printed on 10 Sep 2018, the stock price of Sun Hung Kai Properties, the second largest real estate developer in Hong Kong has managed to stage a rebound of 2.9% to print a high of 113.20 today, 12 Sep 2018.
  • The aforementioned rebound is likely to be corrective in nature within a medium-term down trend in place since Jan 2018 high of 139.60. The weekly RSI oscillator still has potential room to manoeuvre to the downside before it reaches an extreme oversold level of 23. In addition, the daily RSI remains below a corresponding resistance at the 60 level without a clear bullish divergence signal despite hovering close to an oversold level of 30. These observations suggest that medium-term downside momentum of price action remains intact.
  • The key medium-term resistance stands at 121.50 which is defined by the former range support of 11 Dec 2017/19 Jun 2018 and the upper boundary of the medium-term descending channel from Jan 2018 high.
  • The next medium-term support to watch will be at 101.80/50 which is defined by the lower boundary of the medium-term descending channel and a Fibonacci retracement/projection cluster.

Key Levels (1 to 3 weeks)

Intermediate resistance: 116.00

Pivot (key resistance): 121.50

Supports: 101.80/50 & 96.50

Next resistance: 131.30

Conclusion

The medium-term downtrend of Sun Hung Kai Properties remains intact and as long as the 121.50 key medium-term pivotal resistance is not surpassed, it may stage another downleg to target the next support at 101.80/50.

On the other, a clearance above 121.50 shall invalidate the medium-term downtrend for a push up to retest the upper limit of the long-term secular “triangle range” configuration in place since Jan 2008 with intermediate resistance coming in at 131.30.

Charts are from eSignal



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