hang seng index weekly outlook for 02 feb to 06 feb potential recovery above 24350 support 141872015

What happened last week The Hong Kong 40 Index (proxy for the Hang Seng Index) has staged a short-term decline below 25000 towards our predefined […]

What happened last week

The Hong Kong 40 Index (proxy for the Hang Seng Index) has staged a short-term decline below 25000 towards our predefined support level at 24350 as expected. Please click on this link for more details on our previous weekly outlook.

Key elements

Current price is now resting at the lower boundary of the ascending channel (in purple) at 24350.
The 24350 level also confluences with the former horizontal resistance now turns support and 23.6% Fibonacci retracement from 16 December 2014 low to 23 January 2015 high (see 4 hour chart).
Both the intermediate and short-term Stochastic oscillators have dipped into their respective oversold regions (see daily & 4 hour charts).
The 03 September 2014 swing high at 25400 also corresponds closely with the 1.382 Fibonacci projection from 16 December 2014 low to 06 January 2015 low (see 4 hour chart).

Key levels (1 to 3 weeks)

Pivot (key support): 24350

Resistance: 25000 & 25400

Next support: 23800

Conclusion

Based on the above mentioned elements, the short-term decline is likely to be over and the Index may stage a recovery above 24350 towards the range top at 25000/25400.

On the other hand, failure to hold above 24350 may see a deeper slide towards the next support at 23800.

Disclaimer

The information contained in this material 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 report, 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 Asia Pte Ltd

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