Chart of the day Hang Seng reached inflection zone for potential bearish move

Blue avatar for guest contributors
By :  ,  Financial Analyst

Short-term technical outlook on Hang Seng (Tues, 15 Aug 2017)

What happened earlier/yesterday

The Hong Kong 50 Index (proxy for Hang Seng Index futures) had pushed up higher from last Friday, 11 August low of 26832 after a 4% down move from the key predefined 27840/960 medium-term pivotal resistance as per highlighted in our weekly technical outlook report (click here for a recap).

The current pushed up in price action of the Index is in line with a positive closing seen in the major benchmark U.S. stock indices but from a technical analysis perspective, the Hong Kong 50 Index is still at risk to shape another leg of short-term corrective down move within a longer-term bullish trend. Short-term key technical elements as follow;

Key elements

  • The current push up has now reached close to 61.8% Fibonacci retracement of the recent decline from 08 August 2017 high to last Fri, 11 August 2017 low which also confluences with the former minor swing low areas of 03 August/04 August 2017 and the minor descending trendline in place since 08 August 2017 high.
  • The hourly Stochastic oscillator has flashed a bearish divergence signal at its overbought region which indicates that the recent short-term upside momentum of price action has started to abate.
  • The next significant short-term support rests at 26600 which is defined by the former minor swing high area of 14 July 2017 and the 50% Fibonacci retracement of the recent minor up move cycle from 07 July 2017 low to 08 August 2017 high.

Key Levels (1 to 3 days)

Pivot (key resistance): 27500

Supports: 27030 & 26600

Next resistance: 27960 (medium-term pivot)


Therefore, as long as the 27500 short-term pivotal resistance is not surpassed, the Index is likely to shape another potential corrective downleg to retest the 27030 intermediate support before targeting the next support at 26600.

On the other hand, a clearance above 27500 should negate the preferred bearish tone for a further squeeze up towards the 27960 medium-term pivotal resistance.

Chart is  from City Index Advantage TraderPro


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Related tags: Asia Pacific

Open an account today

Experience award-winning platforms with fast and secure execution.

Web Trader platform

Our sophisticated web-based platform is packed with features.
Economic Calendar