Last week global markets dropped a bit, while Hong Kong market slumped. US market closed higher last Friday, so HSI should follow and opened high today. However, the over trend is still quite bearish.
This week there will be some rate decisions and unemployment rates released that can affect the stock market, but they won't be expected to give great impact. Instead, these days its all about the sudden news from Europe and so we have to react fast to the news.
Let's see this week's HSI.
Daily chart of HSI:
On daily chart, it seems like the 50-day SMA has failed to support the index, and the next support would be at 19300 given by the up trend-line these few months which should be quite strong.
Currently it is hard to guess whether there will be a breakdown below the green line; we would have to keep looking at it to see how it is going to be.
Other than this, there seems not much other meaningful hints on this chart.
Weekly chart of HSI:
On weekly chart, the index just fell below the moving averages, and the support given by the flag is at around 19000. Therefore, 19000-19300 would be a strong support zone for HSI.
Even if HSI falls below 19300, on daily chart we would have to be aware of false breakdown as there is support at 19000 on weekly chart.
Another observation is that on weekly chart, the three Simple Moving Averages converge and touch each others. This is a big hint of big volatility following. If allowed, it might be a good time to long volatility through either option strategies or VIX on HSI.
Better closely watch the market or you may lose a great chance.
