Despite of the amazing rebounce, we could not deny that the index already broke down the red up-trend line on both daily chart and weekly chart.
As usual, I have analyzed HSI and hopefully could predict the movement this week.
Daily chart of HSI:
Obviously, the index already broke the red up-trend line with a big gap. This is a typical breakdown. If it holds below the up-trend line for 1-2 more days, we could confirm the breakdown and have a more bearish bias on the market.
The long down shadow on Friday's candle really leaves a question mark to investors. Normally, it is a bull signal as it is a bull rejection, which tells us that investors are still quite optimistic on the market. However, considering the consecutive falls and breakdown last week, it is really not convincing to say that investors are optimistic. This candle might be just a rebounce followed by another big bearish wave.
MACD is falling and has no signal of showing bullish cross. We can anticipate a further slump.
Weekly chart of HSI:
Weekly chart tells us that HSI broke down the red up-trend line and reached the support and bounced. This is the same as that on daily chart.
We can expect that HSI could be within the trading range between the red line and the blue line.
MACD crosses its EMA from above. This is a bearish cross. We should hold a more bearish view on the markets.
However, there is one more point to add, the volume last week was extraordinary high. Are the corporate investors buying all the shares or selling all the shares? It seems like retail investors would not have such confidence to buy that many shares (in other words, corporate investors could not simply sell that high volume). If so, the corporate investors should have known something that could lead the boom of stock market.
After thinking so, I feel like I have made a big mistake selling all my stocks last Friday.
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