hang seng index daily outlook wed 14 oct back at the 2226022180 pull back support of the double bott

(Click to enlarge chart)

What happened yesterday

The Hong Kong 40 Index (proxy for the Hang Seng Index) has continued to trade sideways in the overnight session and broke below the short-term support at 22475 in the opening session today, 14 October 2015.

Please click on this link for a recap on our previous daily outlook.

Key elements

• Current price action is now resting just above the 22260/22180 weekly pivotal support which is the pull-back support of the “Double Bottom” bullish breakout and the 23.6% Fibonacci retracement of the up move from 29 September 2015 low to 09 October 2015 high.
• The hourly (short-term) RSI oscillator is back at its support as well.
• In the shorter-term, the Index is capped by a descending trendline (in pink) now resistance at 22700 follow by 23170 (0.764 Fibonacci projection of the 29 September 2015 low to 06 October 2015 low @1pm).

Key levels (1 to 3 days)

Pivot (key support): 22260/22180

Resistance: 22700 & 23170

Next support: 21370

Conclusion

The Index is now back just above its weekly pivotal support at 22260/22180 but it needs to have a break above 22700 in order to gain impetus for a potential rally to target 23170 in the first step.

On the other hand, a further decline below the 22260/22180 key pivotal support is likely to invalidate the medium-term bullish expectation to trigger a deeper down move towards the next support at 21370.

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