hang seng further potential push up above 19800 1818932016

Daily Outlook, Tues 28 June 2016

(Click to enlarge charts)

What happened earlier/yesterday

After a 7% plunge seen in the Hong Kong 50 Index (proxy for the Hang Seng Index futures) from last Thursday, 21170 high to Friday, 24 June low of 19641 reinforced by the vote for Brexti, the on-going decline has managed to stall as expected on the lower boundary (support) of the medium-term “Triangle range” configuration.

Click here for more details as per highlighted in our latest weekly technical outlook/strategy published yesterday.

Key elements

• The Index has started to evolve within a medium-term “Triangle range” configuration in place since 21 April 2016 high with its lower boundary (support) now at 19880/800.
• The 4 hour (short-term) Stochastic oscillator has dipped back into its oversold region which suggests a potential upswing in price action within its current “triangle range” configuration.
• The near-term resistance stands at 20470/550 which is defined by the minor swing high of 24 June 2016 that has tested thrice in the past.

Key levels (1 to 3 days)

Pivot (key support): 19800

Resistance: 20470/550

Next support: 19560 (medium-term pivot)

Conclusion

Potential upswing in progress within “triangle range” configuration. As long as the 19800 daily short-term pivotal support holds, the Index is likely to see a further potential push up to target the near-term resistance zone of 20470/550 in the first step.

However, a break below the 19800 short-term pivotal support may negate the preferred bullish tone to see a further dip to test this week medium-term pivotal support at 19560.

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.