Featured Trade Hong Kong 50 stalled at key medium term range resistance

Short-term technical outlook on Hong Kong 20 (Wed 20 Feb)

Key technical elements

• The on-going rebound seen in the Hong Kong 50 Index (proxy for Hang Seng Index futures) from yesterday, 19 Feb European session low of 28079 has retested and stalled at the key medium-term range resistance of 28560, click here for the details as per highlighted in our weekly outlook (see daily chart).
• The on-going rebound from 22 Jan 2019 has started to form a bearish “Descending Wedge” configuration (see 1-hour chart)
• The daily RSI oscillator is still being capped by a significant corresponding resistance at the 65/70 level. In addition, the shorter-term Stochastic oscillator has started to inch down from its overbought level and still has further potential room to inch downwards before it reaches an extreme oversold level.
• These observations suggest that the Index may see a potential slide in the short-term below its 28560 key medium-term range resistance.

Key Levels (1 to 3 days)

Pivot (key resistance): 28560/615

Supports: 28100 & 27770

Next resistance: 29100 (lower limit of long-term pivot)

Conclusion

If the 28560/615 pivotal resistance is not surpassed, the Index may see a potential slide to target its near-term support at 28100 (a minor bearish “Descending Wedge” support from 22 Jan 2019 low, see 1-hour chart) and a break below it sees a further decline towards 27770 next.

However, a daily close above 28560 put the bears on hold for a further squeeze up towards the lower limit of the long-term pivotal resistance at 29100 (see daily chart).