Topping? (2011-05-03 HSI analysis)

Another vacation has passed. Time really passes fast and it would be my last month of my 3-year Undergraduate study.

Last week was not a good week, closing with three consecutive black candlesticks. While there was a break-down on daily chart, no bearish signal was given on weekly chart. Big picture is still unclear enough to make any decision.

Daily chart of Hang Seng Index:


Obviously, after the three black candlesticks last week, the index broke the red short-term up-trend line. This isn't a good signal for the next short-period of time.

The green down-trend line still holds, expected to provide a bit support should the index fall that low, at around 23,250.

50SMA appeared to give even better support last week, forcing the candle on Friday to form a long lower shadow.

Weekly chart of HSI:


Fortunately, HSI is still within the diverging triangle. It is still expected to be traded in this range.

Last week the index closed at near the lower bound of the triangle, if the line could hold, HSI could be supported and rebounce. Bottom line would be at around 23,400.

Volume is shrinking while MACD is falling, they are signals of topping. It seems like a critical time this week.