What would be next? (2011-02-21 HSI analysis)

After two days of rest, we could finally stop and assess carefully that whether HSI would continue its consecutive rise.

Let's see the charts of Hang Seng Index for this week.

Daily chart of HSI:


After falling below the up-trend line (in red) for few days, the index finally got its way back above the line. This indicates a false breakdown.

However, it is currently testing a short-term down-trend line (in purple). This would not be a very strong resistant, but certainly provides some power to stop the index from keep rising.

MACD just crossed its EMA from below, which signals a bullish market. Volume breakout further enhances the bullish momentum.
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Weekly Chart:


Hang Seng Index still hasn't surged back above the long-term up-trend line on weekly chart. This is a bad news.

I have indentified a short-term channel within which the index was being traded. The next resistant level would be at around 24,000.

For the downside, apart from the red line, 50-day SMA is also one of the supports as it was two weeks before. The next support level would be at around 22,600.
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To conclude, the index is testing resistance in both daily and weekly charts. Good thing is there is bullish cross of MACD and EMA in daily chart; on the contrary, it needs so much power and momentum to surge through the resistances.

If HSI keeps on surging, which is not too likely in coming few days, next resistance level would be at around 24,000.

On the other hand, 50-day SMA is the support for HSI suggested on weekly chart, which is at around 22,600.