Last week of 2011 (2011-12-28 HSI analysis)

A long holiday has ended. How's your Christmas? This is the last week of 2011, and 2012 is coming. It seems quite peaceful with no bad news from Europe these few days, but how long would this maintain before another trouble comes out again?

Nonetheless, in general, the market still isn't that poor. At least the ultimate support line on Hang Seng Index weekly chart is still valid.

Let's see how HSI would go this week.

Daily chart of HSI:















Once the index broke the lower bound of the flag, and it was confirmed that HSI was able to climb back above this line last week.

Therefore, we would have to admit that the breakdown might be a false one. The green line is still a valid support line to HSI.

Indeed, we can see that the index has moved to the end of the flag. Therefore, breaking might not be too meaningful it is way to near to the vertex for a breakout.

We would have to further observe and find out any other possible patterns on this chart.

Volume was low, which is normal at the end of year and especially under such kind of unpredictable volatile environment.

While daily chart looks not-too-helpful, let's move on to weekly chart.

Weekly chart of HSI:















As usual, HSI is still moving within the purple Pitchfork. The median line plus and 20-week simple moving average have successfully resisted the index for a few times these two months.

Green line still represents the index's long-term extremely-strong support. This line intersects with the lower bound of the Pitchfork at around 16,600, which is therefore a very strong support to the index in the coming three to four weeks.

The retracement is an important thing that I missed out last few weeks. We can see that it was the 50% retracement keeping the index above 17,800.

Not much information is given on weekly chart either. The only fact we know is that the index is pretty near the area with median line of Pitchfork, 20-week and 10-week SMA. These are all resistances, at least until now. This might not be a good sign.

However, if the index is able to breakout, and is confirmed, there will be a great chance for it to reach 20,000 again, which is at the upper line of Pitchfork.

If breakdown, strong support is at 16,600. I could not see other good supports before this level on weekly chart.

Good luck.