Index in Focus Hang Seng probing key support near 25K

Looking at the chart of the Hang Seng, the first thing that jumps out is the clear bearish channel that has pushed prices lower for the past 11 weeks...

Matt Weller
By :  ,  Head of Market Research
August 26, 2021 11:35 AM
Matt Weller
By :  ,  Head of Market Research

Index in Focus: Hang Seng probing key support near 25K

While US indices continue to set new highs on a seemingly daily basis, stock markets in some other areas of the world are struggling. In the case of Hong Kong’s Hang Seng index, prices are approaching an outright bear market, with a nearly -20% drop from the February high. The region continues to struggle to get the COVID pandemic under control, and the combination of ongoing economic restrictions and regulatory uncertainty are taking a toll on the economy.

Looking at the chart of the Hang Seng, the first thing that jumps out is the clear bearish channel that has pushed prices lower for the past 11 weeks. At the moment, the 61.8% Fibonacci retracement of the March 2020 – February 2021 rally near 25,000 continues to provide support, but the bourse has been unable to make a new “higher high” for months, leaving the overall technical bias favoring the bears.

Moving forward, a conclusive break of support in the upper-24,000s would open the door for a continuation lower in the Hang Seng, with the next major level of support coming in at the confluence of the 78.6% Fibonacci retracement and the October low near 23,200. While a break out of the established bullish channel may weaken the bearish outlook on the index, it would take a move above the 50-day EMA and previous-support-turned-resistance at 26,800 to flip the medium-term bias remotely bullish:

Source: StoneX, TradingView

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.
Related tags: Indices Trade Ideas

Latest market news

View more
USD/JPY analysis: Focus turns to FX intervention as traders eye 155 handle
Today 11:00 AM
EUR/USD, Oil Forecast: Two trades to watch
Today 08:33 AM
China A50, Hang Seng, USD/CNH: Economic revival, state intervention creates ample trade opportunities
Today 07:04 AM
US dollar ponders correction as bond prices approach support
Today 06:20 AM
AUD/USD, ASX 200: Jobs report has little RBA implications, back to watching China
Today 02:40 AM
USD/JPY, Nikkei 225: Even the strongest market trends are under threat
Yesterday 11:48 PM

Open an account today

Experience award-winning platforms with fast and secure execution.
Open account

Web Trader platform

Our sophisticated web-based platform is packed with features.
Learn more
Economic Calendar

Latest Indices articles

stocks_03
DAX outlook remains unfavourable despite support from earnings
By:
Fawad Razaqzada
Yesterday 11:00 AM
    Nasdaq 100 Forecast: “Magnificent Seven” Q1 2024 Earnings Preview
    By:
    Matt Weller CFA, CMT
    April 16, 2024 08:00 PM
      Close-up of market chart showing downtrend
      Nasdaq 100, S&P 500 and DAX analysis: Technical Tuesday - April 16, 2024
      By:
      Fawad Razaqzada
      April 16, 2024 04:54 PM
        stocks_04
        Dow Jones, Nasdaq forecast: Key levels for US indices
        By:
        Matt Simpson
        April 15, 2024 06:08 AM

          This report 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.

          StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

          In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

          StoneX Financial Pte. Ltd. is not under any obligation to update this report.

          Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.