[VIDEO] Hang Seng breaks neckline of Head and Shoulders formation

Joe Perry
By :  ,  US Market Analyst

The Hang Seng put in a high this year on February 18th, at 31,088, as price and the RSI began to diverge, while the RSI was in overbought territory.  The Hang Seng then pulled back and formed a head and shoulders pattern.  On Wednesday, the index broke through the neckline of the formation and fell to the 38.2% Fibonacci retracement level from the lows of September 28th, 2020 to the highs of February 18th, near 27,898. 

The target for a head and shoulders pattern is the distance from the head to the neckline, added to the breakdown point below the neckline, which is near 25,370

If geopolitical and trade tensions between China and other countries remain, the Hang Seng may continue towards the head and shoulders target near 25,370

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Related tags: Trade Ideas Indices China EU

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