hang seng daily outlook tues 15 mar 2016 20520 risk zone reached further potential decline ahead 180

(Click to enlarge charts) What happened yesterday/earlier The Hong Kong 50 Index (proxy for the Hang Seng Index futures) has staged the expected “last push […]


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By :  ,  Financial Analyst

Hang Seng (4 hour)_15 Mar 2016

Hang Seng (1 hour)_15 Mar 2016(Click to enlarge charts)

What happened yesterday/earlier

The Hong Kong 50 Index (proxy for the Hang Seng Index futures) has staged the expected “last push up” towards the 20380/520 risk zone (printed a high of 20504 on 14 March 2016).

Please click here for a recap on our previous short-term daily outlook/strategy.

Key elements

  • Price action has tested and staged a retreat from the 20380/520 risk zone. This significant area of 20380/520 is defined by the former swing lows area of 24 August 2015 and 29 September 2015, upper boundary of the bearish descending channel in place since 26 May 2015 high and a Fibonacci cluster.
  • The daily (medium-term) RSI oscillator has now flashed a bearish divergence signal at its resistance where price action of the Index has been capped and staged a decline thereafter in the past two occasions (highlighted by the pink ovals). This observation suggests a slow-down in upside momentum of price action where the risk of a decline increases as we are at the end of the current countertrend rally cycle that started from 11 February 2016 low of 18056 (click here for more details as per highlighted in our latest weekly outlook/strategy published yesterday).
  • The significant short-term support now rests at 19800 which is defined by the lower boundary of the ascending channel from 11 February 2016 low and the minor swing lows area of 03 March and 11 March 2016.

Key levels (1 to 3 days)

Pivot (key resistance): 20520

Support: 19800

Next resistance: 21000 (weekly pivot)

Conclusion

As long as the short-term pivotal resistance at 20520 is not surpassed, the Index is likely to see a further potential decline to target the 19800 support in the first step.

On the other hand, a clearance above the 20520 short-term pivotal resistance may put the bears on hold to see a “residual” squeeze up towards the excess at 21000 (weekly pivotal resistance).

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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