Week for further observation (2012-03-19 HSI analysis)

Last week's stock market was pretty quite, without big movements. Hang Seng Index tested 21,600 for the third time but still it was unable to break out. US markets surged greatly, S&P 500 closed above 1,400 on Friday.

Gold price plunged hardly at the beginning of last week, and was able to pare some losses on Thursday and Friday. Nevertheless, it has broken down the 200-day Simple Moving Average level and it will then become a resistant to the price.

This week there is no important economic data, so it relies heavily on news coming out. Watch out with breaking news.

Daily chart of HSI:















On daily chart, we can easily see that after reaching the 21,600 resistant on last Wednesday, HSI started dropping, but was still able to close above 20-day SMA.

In order to predict the week's movements, I tried to add Pitchfork. The purple fork seems to be q quite reasonable bound to the index.

If so, support will be at 21,000 by the horizontal line, and around 20,500 by the pitchfork. The index probably starts sliding to lower levels.

If it breaks out instead, resistant would be at 22,450 and ultimate target is 24,650, which seems to be a pretty impossible target at this moment.

Weekly chart of HSI:















On weekly chart, I have added Ichimoku indicators. We can see that the index closed slight above the cloud, but we will have to see its performance this week to decide whether it is considers break out.

Also, there is a moving average cross, which is a sign of bullish. Still, more time is needed to confirm that it is not a whip-saw.

Fibonacci level at 21,600 still serves well as resistant. This week it would be a battle between the fibaoncci and MA&Ichimoku.

As there are not many hints telling us about the movements, it seems to be a good idea to stop for a while.