hang seng daily outlook tues 22 mar 2016 short term bearish tone remains intact below 20840 18029520

(Click to enlarge charts)

What happened yesterday/earlier

The Hong Kong 50 Index (proxy for the Hang Seng Index futures) has continued to inch lower below our medium-term pivotal resistance at 21000 despite a rumour that China’s policy markets will firm up details this week on the “Hong Kong-Shenzhen Stock Connect” programme.

Please click on this link for a recap on our latest medium-term outlook/strategy published yesterday.

Key elements

• The Index has banged off from a trendline resistance that has linked up the “lower highs” since 23 October 2015 high now at 20840 which is also the minor swing high areas of 18 March/21 March 2016
• The significant short-term support stands at 20290 which is defined by the lower boundary of the ascending channel in place since 11 February 2016 low and the minor swing low of 17 March 2016 @6pm.
• The hourly Stochastic oscillator has almost reached its extreme oversold area which suggests a possible rebound/consolidation first at the 20290 support.

Key levels (1 to 3 days)

Pivot (key resistance): 20840

Support: 20290

Next resistances:  21000 (weekly pivot) & 21500

Conclusion

Bearish tone remains intact on the short-term for the Index. As long as the 20840 short-term pivotal resistance is not surpassed, the Index is likely to shape a further potential slide to target the 20290 support before a possible short-term rebound/consolidation sets in.

On the flipside, a break above the 20840 short-term pivotal resistance may put the bears on hold to see a test on the 21000 weekly pivotal resistance. Only a clearance above 21000 is likely to invalidate the medium-term bearish view for a push up towards the next resistance at 21500 in the first step.

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.

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 cityindex.com.sg for the complete Risk Disclosure Statement.