Chart of the day Hang Seng pull backed towards short term ascending channel support

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By :  ,  Financial Analyst

Short-term technical outlook on Hang Seng (Tues, 31 Aug 2017)

What happened earlier/yesterday

The Hong Kong 50 Index (proxy for Hang Seng Index futures) had continued its relentless rally from its recent medium-term swing low area of 11 August/18 August 2017 and closed slightly above the 28000 key psychological level of 28000 at 28028 on Wednesday, 30 August.

The Index has not seen in the 28000 level since May 2015 and in today’s morning Asian session, the Index had retraced some of its gains and pull-backed by close to 1% from yesterday’s intraday high of 28157. Short-term key technical elements as follow;

Key elements

  • This morning’s pull-back in price action of the Index has reached a significant short-term support of 27790 which is defined by a short-term bullish ascending channel in place since the 18 August 2017 minor swing low and close to the 23.6% Fibonacci retracement of the recent rally from 18 August 2017 low to yesterday’s high of 28157.
  • The hourly Stochastic oscillator has reached and started to inch up from its extreme oversold level. This observation indicates the revival of short-term upside momentum of price action.
  • The next significant short-term resistance stands at 20300 which is defined by the 1.618 Fibonacci projection of the up move from 11 August 2017 low to 16 August 2017 high projected from 18 Aug 2017 minor swing low of 26977.

Key Levels (1 to 3 days)

Pivot (key support): 27790

Resistance: 28300

Next support: 27600/455


The short-term uptrend of the Index remains intact. As long as the 27790 pivotal support holds, the Index may see a further up move to target the next resistance at 28300 in the first step.

However, failure to hold above 27790 may negate the bullish tone to see a deeper pull-back towards the next support at 27600/455 (the lower boundary of the medium-term ascending channel from 05 Jul 2017 low & the former minor swing high area of 17 Aug 2017)

Chart is from City Index Advantage TraderPro


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Related tags: Asia Pacific

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