hang seng index daily outlook 03 nov potential push up to test medium term upside trigger level at 2

(Click to enlarge charts)

Key elements

• The Hong Kong 40 Index (proxy for the Hang Seng Index) has staged a bullish breakout above its former short-term trendline resistance (in dotted green) joining the highs since 23 October 2015 @9pm now turns pull-back support at 22500.
• The corresponding hourly (short-term) RSI oscillator has also pierced above its former trendline resistance and the 50% neutrality level. These observations suggest upside momentum remains intact and the RSI still has room for further upside before reaching its extreme overbought level.
• The medium-term trigger level remains at 23100 which is defined by a longer-term trendline resistance in place since 26 May 2015 (click here for more details as per highlighted in our latest weekly outlook).

Key levels (1 to 3 days)

Pivot (key support): 22500

Resistance: 23100

Next support: 22260/22180 (weekly pivot)

Conclusion

As long as the daily (short-term) pivotal support holds, the Index is likely to see a continuation of its current bullish move to test the medium-term upside trigger level at 23100.

On the flipside, a penetration below the 22500 pivotal support may invalidate the expected bullish tone to see a slide to retest the pull-back support of the “Double Bottom” bullish breakout at 22260/22180.

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.