Hang Seng Index opened at 20350, slumping to as low as just slightly above 20000, and gaining again closing at 20701. The breakdown mentioned last week was confirmed to be a false one, and the index just rose above the resistant line. Breakout is yet to be confirmed.
Gold surged quite a bit in weekday, from around $1650 to $1680, and then dropped back to around $1657 on Friday. My bullish view on it still hasn't vanished.
Let's see this week's HSI, though the charts are not saying much.
Daily chart of HSI:
The index first dropped below the purple up-trend line on last Tuesday and plummeted on the next day. While we might think that the break down has confirmed, it was able to climb above this line at the end of the week, telling us that it was a false break down.
HSI being at the interception of two trend-lines, if it is not break down, then it would be a break out. Currently it is above both the green down-trend channel and the purple up-trend line. It seems like it is trying to break out. Some more time is needed to confirm.
The next resistant is still 21,600 using Fibonacci projection on the flag breakout. Support is increasing, and it would be around 20550-20700 this week given by the purple line, and 20400-20250 given by the green line. This area is expected to be the support zone if the index is dropping below the purple line again.
Weekly chart of HSI:
On weekly chart, we can see that Ichimoku cloud seems to be firmly support the index from plunging too low. The price closed within the cloud, so it is still hard to say whether it would go down or up.
Nevertheless, another Fibonacci retracement tells us that resistant is at 21600, which is the same as that on daily chart. This level is still quite strong.
Support is quite low on weekly chart, at around 19300-19500. This area should be too far at this moment.
So this week it should be better to stay away from the market 'cause the risk is too high for placing an odd on either side.
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