Could it break? (2011-04-04 HSI analysis)

The market was doing quite good last week. HSI reached the resistance again. This week we have to see whether it could break it or it would turn its direction.

Daily chart of HSI:


Obviously HSI touched the red down-trend line. There is a very strong selling-power here.

One thing to mention, 10-day SMA is touching 20-day SMA from below. We still could not confirm whether it is a real cross or just a fake one (whipsaw?). Time will tell.

MACD is at level around 0, and is increasing, showing that the momentum for rise would be quite strong.

Nevertheless, if the index could not break the resistance, it could probably fall to around 22,400.

Weekly chart of HSI:


Weekly chart tells the same story. HSI reaches the red resistance.

MACD and its EMA are touching each other, having the probability of bullish cross.

I have added a fibonacci retracement at recent high/low, and found that on weekly chart, 38.2%-level seems to be quite strong. Therefore, I expect that there would be a support at around 23,200.

So basically, all our investment ideas would depend on whether HSI could break the resistance on both daily and weekly charts.