Hang Seng Index Technical Outlook: Upside Could Be Limited

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Hang Seng Index, Hong Kong Equities, HSI – Technical Outlook:

  • The Hang Seng Index is operating into a serious hurdle.
  • Upside may very well be restricted because the broader development stays down.
  • What are the important thing ranges to look at?

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HANG SENG INDEX TECHNICAL OUTLOOK – NEUTRAL

The upward momentum within the Hang Seng Index (HSI) seems to be fading, suggesting that the one-month rebound may have restricted upside from right here.

HSI, up 25% from the October low of 14597, has run into a troublesome barrier at about 18415: the 89-day transferring common, coinciding with the March low of 18235 and the 200-period transferring common on the 240-minute charts. The shorter transferring common has posed quite-strong resistance since late 2021, so a retreat can’t be dominated out – state of affairs 1 highlighted within the earlier replace.

Hang Seng Index Daily Chart

Chart Created Using TradingView

Moreover, bullish momentum since October hasn’t been any totally different from earlier corrective rebounds this 12 months (see chart). Hence, it might be too quickly to conclude that the Hong Kong benchmark index has turned a nook. Indeed, the medium-term downtrend stays intact (see chart).

The development and momentum, as indicated by the Moving Average Convergence Divergence (MACD) indicator, stay pointed down on increased timeframes, together with the month-to-month and quarterly charts. Any break under fast assist at Monday’s low of 16834 would verify that short-term upward strain had eased, exposing draw back dangers towards the October low of 14597.

Hang Seng Index Monthly Chart

image2.png

Chart Created Using TradingView

An alternate state of affairs is a comparatively bullish one, the place HSI breaks above fast resistance at 18415, triggering an inverse Head & Shoulders (H&S) sample. The left shoulder is the early-October low, the top is the end-October low, and the precise shoulder is the November 22 low. Such a break may open the door for an increase towards 21800, the implied value goal of the H&S setup.

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— Written by Manish Jaradi, Strategist for DailyFX.com





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