Last week Hang Seng Index experienced another consecutive drops. reaching as low as around 22,300. This was within the support area I mentioned last week.
Daily chart of HSI:
On last Tuesday, we could see the HSI dropped below the down-trend line in red. Then it started to move lower.
Consecutive slumps were not a surprise. And we could expect support at around 22,350. This was shown by the longer lower shadow last Thursday, and the buying force there last Friday.
The bottom line should be at around 22,100. The index has been above this level since last September, and if it breaks down, it isn't hard to find HSI dropping below 21,000.
Good news is that the volume spiked despite of the lower levels. Investors are believing that the index would bounce after dropping to such a strong support.
The resistance is at around 22,800, due to the red solid line.
Weekly chart of HSI:
The chart looks a bit messy with lots of lines; however, they give us a lot of hints on how HSI is going to move.
Dotted lines (in green, red and blue) are relatively useless lines. Though the index dropped below the blue up-trend line, as we could not see many points on this line, it should be relatively weak.
Instead, green solid green appears to be the next support to the index on weekly chart. The level is as low as around 21,700. Not too far, but this also means that HSI falls below the horizontal area on daily chart. This should be bottom line.
Resistance is the same at around 22,800.
So this week pretty depends on the CPI announced in China which might signal change in interest rate, and how ECB is going to solve the financial problem in Europe.
Good luck.
No comments:
Post a Comment