hang seng daily outlook fri 12 feb 2016 further potential drop below 1852018810 1796982016

(Click to enlarge chart) What happened yesterday The Hong Kong 50 Index (proxy for the Hang Seng Index futures) has continued to drop and hit […]


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By :  ,  Financial Analyst

Hang Seng (1 hour)_12 Feb 2016(Click to enlarge chart)

What happened yesterday

The Hong Kong 50 Index (proxy for the Hang Seng Index futures) has continued to drop and hit our expected medium-target set for this week at 18200.

Please click on this link for a recap on our previous daily outlook/strategy.

Key elements

  • In today’s morning session (12 February 2016), the Index has managed to see a rebound of 2.3% from yesterday low of 18056. Interestingly this push up in price action has managed to stall a pull-back resistance of the bearish breakout (gapped down) at 18520.
  • The hourly (short-term) Stochastic oscillator has already inched up into its overbought which suggests limited upside potential at this juncture.

 Key levels (1 to 3 days)

Intermediate resistance: 18520

Pivot (key resistance):  18810

Support: 17800

Next resistance: 19300/400

Conclusion

Even though the Index has met our medium-term downside target at 18200 but technical elements are still showing no clear signs of a potential bullish reversal or countertrend movement. Therefore, we are maintaining our bearish stance below the short-term pivotal resistance of 18810 for another potential downleg to target the next support at 17800.

However, a break above the 18810 pivotal resistance is likely to negate the bearish tone for a further rebound towards the trendline resistance that has linked the lower highs since 29 January 2016 now at 19300/400.

Disclaimer

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.

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