Chart of the day Hang Seng pullbacked towards key short term support

Short-term technical outlook on Hong Kong 50 Index (Thurs, 12 Apr)

Key technical elements

• In today, 12 Apr Asian session, the Hong Kong 50 Index (proxy for Hang Seng Index futures) gapped up in the open and printed an intraday high of 31164 (coincides with the former minor range support from 14 Mar/20 Mar 2018 at 31165). Thereafter, it pull-backed by 1.8% to record an Asian session low of 30601.
• Interestingly, the aforementioned pull-back stalled at a key short-term support zone of 30600/30400 which is defined by the lower boundary of a minor ascending channel from 04 Apr 2018 low, the former minor swing high area of 09 Apr 2018 and the 23.6% Fibonacci retracement of the on-going short-term uptrend from 09 Apr 2018 low to today’s Asian session high of 31164.
• The price action has started to rebound from the 30400  minor ascending channel support coupled with the hourly Stochastic oscillator that has started to reverse up from its oversold region. These observations suggest a revival of short-term upside momentum of price action.
• The next significant short-term resistance stands at 31340/460 which is defined by the descending trendline from 29 Jan 2018 high and a Fibonacci projection/retracement cluster.

Key Levels (1 to 3 days)

Intermediate support: 30600

Pivot (key support): 30400

Resistances: 31165 & 31340/460

Next support: 30000/29900

Conclusion

Therefore as long as the 30400 key short-term pivotal support holds, the Index may shape another round of minor impulsive upleg to retest 31165 before targeting the 31340/460 resistance.

On the other hand, a break below 30400 negates the bullish tone for a corrective pull-back to retest 30000/29950 (psychological level &former swing low areas of 23 Mar/03 Apr 2018).

Chart is from City Index Advantage TraderPro