Hang Seng Index closed at 18,434 at the end of 2011, high and low in the year are 24,468 and 16,170 respectively. In general, the index dropped around 4,000 points in 2011 due to the Europe debt crisis.
Situation is not very improved up till now. There are still no concrete measures to solve the problems. 2012 predicted to be another tough year, not to forget the myth that the world will end in Dec-2012.
Anyway, let's take a look at HSI charts though they are not very different from last week's.
Daily chart of HSI:
Hang Seng Index dropped below the lower red line again in the last two trading days in 2011. However, it should not be treated a formal break down as it was almost at the end of the flag.
Nevertheless, the lower red line has become a resistant and there is a very short-term support given by the green line. The short-term trading range is 18000-18500.
MACD is getting flat, but there isn't much hints given by it.
Let's move on to weekly chart.
Weekly chart of HSI:
As shown in the chart, after reaching the strong resistant level last week, the index plunged. This level was given by 10-week and 20-week Simple Moving Averages as well as the median line of Pitchfork, so it was quite strong.
Next support will be at around 17,800 given by 50% retracement level. This level has been successful in supporting HSI for a few times.
If the index breaks even lower, ultimate support will be at 16,700. This is a very strong support as the index has been above the green for a long time.
For upside, there is still strong resistant at around 18,600. It is still considered a big obstacle to the index.
It seems like the index will be moving sideways to start off 2012.
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