hang seng index daily outlook wed 11 nov back at 2226022180 key support for a potential push up 1749

(Click to enlarge chart)

What happened yesterday

The Hong Kong 40 Index (proxy for the Hang Seng Index) has continued to drift lower and tested the key pull-back support zone at 22260/22180.

Key elements

• Current price action is now resting at the medium-term pivotal support zone of 22260/22180 which is the pull-back support area of the ‘Double Bottom” bullish breakout (click here for more details as per highlighted in our latest weekly outlook/strategy).
• The short-term (hourly) Stochastic oscillator has exited from its oversold region with a prior bullish divergence signal. This observation suggests that the downside momentum of its current down move has dissipated and the Index is likely to see am upturn in price action at this juntrue.
• Intermediate resistance to watch is the short-term descending trendline (in pink) that is capping the Index at 22630  follow by the key medium-term resistance at 23100/23260  which is defined by the trendline (in red) joining the highs of 23 October and 04 November 2015 and a Fibonacci cluster.

Key levels (1 to 3 days)

Pivot (key support): 22260/22180

Resistance: 22630 & 23100/23260

Next support: 21280

Conclusion

As long as the 22260/22180 pivotal support holds, the Index may see a push up to test the intermediate resistance at 22630 and breaking above it is likely to add impetus for further up move to target the 23100/23260 key medium-term resistance (range top).

However, a break below the 22260/22180 pivotal support is likely to invalidate the expected push up scenario to see the start of a deeper decline towards the next support at 21280 in the first step.

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