The week the futures of HVIX (Hang Seng Index Volatility Index) is released, though it is not expected to affect the market much. However, hedge funds and corporate investors might use this derivative to hedge their positive and that we would have to be aware of it.
There is no important economic data revealed this week till Friday when the GDP of UK and Germany are announced. Still it will be a news-dominated week.
Daily chart of HSI:
On daily chart, we can see that HSI reached 21,600 strong resistant level. The last two doji somehow tell us that the surge might get weaker and probably its time to drop.
21,600 is not only the start of the previous, but it is also one of the projection levels estimated by the flag breakout. Therefore, this would be a pretty strong resistant to the index.
If the index falls, the 10-day SMA will give a little support at around 21,050. Then 23.6% at around 20,300 and the green down-trend line at around 19,700 will be major supports.
Weekly chart of HSI:
On weekly chart, there is another resistant force at current level, given by the retracement level of 23.6%. This suggests the same thing as what daily chart tells.
In fact, we can see that there is no strong support levels on weekly chart. Once it starts dropping, the ground will be at around 19,500.
Therefore, we may conclude from the two charts that, there are weak supports at around 21,050, and strong support at 19,500-19,700. Once the index starts dropping, we could expect it to go below 20,000.
Good luck.
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