hang seng index bullish breakout potential up move to resume above 23630500 support 1833022016

Daily Outlook, Wed 05 Oct 2016

(Click to enlarge charts)

What happened earlier/yesterday

The Hong Kong 50 Index (proxy for Hang Seng Index futures) has failed to shape the expected “final downleg” as per highlighted in our prior short-term daily technical outlook/strategy (click here for a recap).

Key elements

• The Index has staged a bullish breakout from the mini “symmetrical triangle” consolidation in place since 9 September 2016 high of 24406. The pull-back support of this consolidation bullish breakout is now at 23630.
• Short-term key support now rests at 23500 which is defined by the minnow swing low area formed yesterday.
• Significant short-term resistance stands at 24500 which is defined by the former major swing high area of 16 January/10 April 2011 and the 61.8% Fibonacci retracement of the significant down move from 26 April 2015 high to 11 February 2016 low of 18056 (see weekly chart).

Key levels (1 to 3 days)

Intermediate support: 23630

Pivot (key support): 23500

Resistances: 24070 & 24500

Next support: 23260

Conclusion

Bullish breakout from “symmetrical triangle” range consolidation and as long as the 23500 short-term pivotal support holds, the Index is likely to see a further upside movement to target 24070 before 24500.

On the other hand, failure to hold above 23500 is likely to see a failure bullish breakout (bull trap) for a slide back towards the next support at 23260 (ascending trendline from the minor swing low of 13 September 2016)

Charts are from City Index Advantage TraderPro

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