hang seng index daily outlook wed 23 sep hovering above range support at 20860 1380382015

(Click to enlarge chart)

What happened yesterday

The Hong Kong 40 Index (proxy for the Hang Seng Index) has managed to push up in the  Asian session but failed to hit expected upside target at 22400 (printed a high of 22127 before it tumbled by 3% in the European/U.S. sessions.

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

Key elements

• The Index is now hovering above its range support at 20860 which is also the current weekly pivotal support (click here for more details as per highlighted in our latest weekly outlook).
• The 20860 range support is defined by the ascending trendline linking the lows of 24 August 2015 @8pm and 07 September 2015 low @4pmand 76.4% Fibonacci retracement of the up move from 08 September 2015 low to 16 September 2015 high.
• The hourly (short-term) Stochastic oscillator has dipped back into its oversold region which suggests a potential rebound in in price action is round the corner.

Key levels (1 to 3 days)

Pivot (key support): 20860 (weekly pivot)

Resistance: 21600 & 22400

Next support: 20070

Conclusion

Short-term technical elements are advocating for a potential rebound. As long as the 20860 pivotal support holds, the Index may see a push up to test the short-term pull-back resistance at 21600 in first step.

On the other hand, a break below the 20860 pivotal support is likely to see the continuation of the slide to target the “Black Monday”, 24 August 2015 low at 20070.

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