Bearish? Bullish? (2010-06-16 HSI analysis)

From different blogs and opinions from others, I found that many people expected a bearish few weeks ago. But recently they had changed their view to bullish. Personally, I am bearish for a longer run. If you ask me about my opinion on HSI in the coming month, I would instead answer: long it.



Above is daily chart for HSI. The index broke the red short-term resistance in late May and is heading upwards. However, this looks really similar to what happened in mid-2008.



After 50 SMA crossed 250 SMA from above, a 2-month bullish followed. The surge was around 6,000 points. Then, bad news revealed and HSI started dropping severely for more than 6 months, from 26377.99 to 10676.29.

It just looks so similar to what is happening now. Though the rise and fall now would not be as much as that in 2008, I would predict a similar pattern. Therefore, it is critical for investors to know when to leave the market after a certain surge in near future. Today, we can try to buy some potential stocks to wait for this rising wave. I would discover more good stocks for long positions.