hang seng index daily outlook wed 30 sep on going rebound is losing momentum 1444062015

(Click to enlarge chart) Key elements Yesterday’s rebound seen in the Hong Kong 40 Index (proxy for the Hang Seng Index) has gapped in the […]


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By :  ,  Financial Analyst

Hong Kong (1 hour)_ 30 Sep 2015(Click to enlarge chart)

Key elements

  • Yesterday’s rebound seen in the Hong Kong 40 Index (proxy for the Hang Seng Index) has gapped in the today’s opening session and reached the 20900 pull-back resistance (in dotted red) of the former trendline support joining the lows since “Black Monday”, 24 August 2015.
  • Short-term price action has started to show signs of exhaustion. The past hour candlestick has formed a “Doji” at the 20900 pull-back resistance which indicates the sentiment of the bulls are “hesitant and indecisive” to push the Index higher.
  • The hourly (short-term) Stochastic has reached the extreme overbought level and started to inch down. This observation suggests that the upside momentum of the on-going rebound seen from yesterday’s low has started to lose its strength.

Key levels (1 to 3 days)

Intermediate resistance: 20900

Pivot (key resistance): 21360

Support: 20070

Next resistance: 22260 (updated weekly pivot)

Conclusion

Short-term technical elements suggest that  the on-going “relief rebound” has started to lose upside momentum and the Index is likely to resume its medium-term (1-3 weeks) downtrend at this juncture. As long as the 20900/21360 key short-term resistance zone is not surpassed, the Index may see a decline to retest the “Black Monday”, 24 August 2015 low at 20070 in the first step.

On the other hand, a break above the 21360 daily (short-term) pivotal may see a squeeze up to retest the range top in place since 25 August 2015  at 22260.

Disclaimer

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