After the government announced giving out cash of HKD6,000, it seemed like everyone was so happy with it and the whole investment atmostpher was quite good.
Let's see how HSI will go next week.
Daily Chart:
Hang Seng Index jumped greatly last Friday, breaking the short-term trend-line for the first time. We could see that 50-day Simple Moving Average acts well to support the index from dropping lower.
The daily chart suggests that the index would be trading in a short range, since it could hardly break both the red down-trend line and blue up-trend line.
MACD is at low level which makes the index tend to go up. But let's look at the weekly chart.
Weekly Chart:
The red super short-term down-trend line works very well to stop the index from surging higher.
The green long-term up-trend line has its job done as well (after the breakdown).
Now both the red and green lines intersact each other, forming an extremely strong resistance for the index. HSI is expected to fall after reaching this intersaction.
MACD is sliding as well, and it is still above zero, providing evidence that the index could hardly reverse its direction to upwards.
Support will be at around 22,600. This is quite strong as it has been providing forces to the index for long time.
Therefore, next week I would expect a drop of HSI to around 23,000 first, suggested by daily week; then possibly slumping further to 22,600 and will be supported.
For the upside, 23,600 will be a stop, which is only 192 points from the index now.
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