Correction (2010-10-18 HSI analysis)

Hang Seng Index was up around 600 points last week. It was a good week for everyone. After DJIA broke the resistant, it dropped back into the uptrend channel. It looks like a corrections would be arriving soon.

Daily Chart:

What daily chart shows is nothing but resistant. The index is currently facing strong obstacle, which is the combination of long-term fibs level and short-term pitchfork. MACD has reached a pretty high level, though it is still moving upwards, the power seems much weaker. It is more likely for consolidations or corrections.

Weekly chart:

Weekly chart gives little hope to us. 20-day SMA just touched 50-day SMA from below. A cross would be even better, but there is still a chance that the index falls and the 20-day SMA drops as well. Then it would become a failed bullish cross formation.

Hang Seng Index is more likely to be under consolidation or correction in the coming week, led by that of Dow Jones Industrial Averages! Be careful everyone!