hang seng daily outlook tues 12 jan 2016 watch the 20130 intermediate resistance 1792812016

(Click to enlarge charts) Key elements The Hong Kong 40 Index (proxy for the Hang Seng Index) is still hovering just above the long-term key […]

(Click to enlarge charts)

Key elements

The Hong Kong 40 Index (proxy for the Hang Seng Index) is still hovering just above the long-term key support at 19800/700 (click here for more details as per highlighted in our latest weekly strategy/outlook).
On the shorter-term, the Index is still being capped by a trendline resistance that has linked the lower highs since 30 December 2015 at 20130.
The next resistance stands at 20680 which is the former range bottom area of “Black Monday”, 24 August 2015 to 29 September 2015 (see daily chart).
The hourly (short-term) RSI oscillator has flashed a bullish divergence signal which suggests that the current down move in price action is losing downside momentum.

Key levels (1 to 3 days)

Pivot (key support): 19800/700

Resistance: 20130 & 20680

Next support: 19200

Conclusion

As long as the 19800/700 pivotal support is not broken and a break above 20130, the Index may see a short-term push up to retest the 20680 level.

However, a break below 19800/700 may kick start a deeper correction to target the next support at 19200 in the first instance.

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