Last week basically was dominated by news around Europe debt problem. Hang Seng Index opened high on Monday, but then pared its losses and plunged in following four days.
VIX still has no sign of slumps in low levels. But it is still not at emergent times when volatility index keeps on climbing to new highs.
Let's get back to Hang Seng Index.
Daily chart of HSI:
The red down-trend line is basically how the index has been moving in these few weeks, starting from August 2011.
Last week the index attempted to break this red resistant line, but apparently it failed and fell back below this line, within the red channel.
Buy drawing a fibonacci retracement using the high and low within the red channel, we can see that 38.2% successfully resisted the index two weeks ago, and 23.6% supported the index well last week. These two are probably the important levels to look at in short period.
But in general, it is pretty clueless when looking at the daily chart alone.
Weekly chart of HSI:
The Pitchfork is just the normal one that I was using all time. We could see that last week the index was well supported by the lower line of the fork.
Besides, the 23.6% on this chart might somehow help support the index as well. This results in a pretty large supportive force at this area.
In fact, the index was resisted by the 10-day Simple Moving Average last week which therefore could not surge higher.
Combining the two charts, I somehow have a little bullish view in short-period this week. If the index rises, around 19,500 would be an extremely strong resistant. The index would need some power to break out.
For the down-side, around 18,000 will be a short term support. If the index breaks again, then there would be no immediate support.
Good luck.
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