Last week the global stock market plunged quite hardly due to situations in Europe. Hong Kong stock market was slumping even worse compared to other major stock markets. Basically it has dropped below many major support lines and currently there is no other good support levels.
The Dollar rose quite a lot, rising from 80.70 on Monday to as high as over 81.70 on Friday. Commodities plummeted in the beginning of the week. Gold price dropped below 1530 on Wednesday, but was able to gained and closed at 1590 on Friday.
This week there isn't much economic data that has significant influence on the markets. The most critical one would be Germany GDP to be revealed on Thursday (HKT).
Let's see this week's Hang Seng Index (HSI)
Daily chart of HSI:
On this chart, obviously the index has plunged blow many good supports. Now it is at the position of "open air" whether we can hardly find good support.
Good news is that we can see that there is only one candle outside of those areas. If the index is able to climb up above the two supports, we can treat it as false breakdown.
Nevertheless, the Pitchfork tells us that the index is currently under a bearish trend. It may have rebound but overall it should be heading downwards.
The level to be concerned of would be 19200. If HSI can close above this level in these two days, then the situation isn't too bad.
Otherwise, we can expect a further quick and hard plummet on daily chart.
Weekly chart of HSI:
On weekly chart, after reaching a major resistant at around 21000 three weeks ago, the index plunged hardly, crossing all 10-, 20- and 50-week simple moving averages in a sudden.
We can see that an ultimate support given by a pretty long-term up-trend line is at around 17400. On the other hand, a Fibonacci retracement level also provides support at 17800.
Therefore, we can expect a very strong support at this zone. If the index drops to this level and starts to seek support, it would be an extremely good opportunity.
For the upside, 19500 provides slight resistant, and stronger resistant would be at 20000, due to both psychological and 50-week moving average.
Good luck to all of you. I might not be able to update the blog that often because I have to spend time on studying CFA Level 2 examination held in early June.
The Dollar rose quite a lot, rising from 80.70 on Monday to as high as over 81.70 on Friday. Commodities plummeted in the beginning of the week. Gold price dropped below 1530 on Wednesday, but was able to gained and closed at 1590 on Friday.
This week there isn't much economic data that has significant influence on the markets. The most critical one would be Germany GDP to be revealed on Thursday (HKT).
Let's see this week's Hang Seng Index (HSI)
Daily chart of HSI:
On this chart, obviously the index has plunged blow many good supports. Now it is at the position of "open air" whether we can hardly find good support.
Good news is that we can see that there is only one candle outside of those areas. If the index is able to climb up above the two supports, we can treat it as false breakdown.
Nevertheless, the Pitchfork tells us that the index is currently under a bearish trend. It may have rebound but overall it should be heading downwards.
The level to be concerned of would be 19200. If HSI can close above this level in these two days, then the situation isn't too bad.
Otherwise, we can expect a further quick and hard plummet on daily chart.
Weekly chart of HSI:
On weekly chart, after reaching a major resistant at around 21000 three weeks ago, the index plunged hardly, crossing all 10-, 20- and 50-week simple moving averages in a sudden.
We can see that an ultimate support given by a pretty long-term up-trend line is at around 17400. On the other hand, a Fibonacci retracement level also provides support at 17800.
Therefore, we can expect a very strong support at this zone. If the index drops to this level and starts to seek support, it would be an extremely good opportunity.
For the upside, 19500 provides slight resistant, and stronger resistant would be at 20000, due to both psychological and 50-week moving average.
Good luck to all of you. I might not be able to update the blog that often because I have to spend time on studying CFA Level 2 examination held in early June.
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