After the crazy rise... (2011-10-31 HSI analysis)

Last week there was good news regarding the European Debt problem, the facilities were expanded. Stock markets surged crazily, including Hang Seng Index. The index finally reached 20,000, since early September.

This week's focus would be on Thursday, depending on how Bernanke comments on the economy. Also there are several unemployment rates to be released this week.

Daily chart of HSI:















After boosting last week, the index reached 50% retracement at around 20,300, and obviously faced huge selling pressure and closed lower, just above 20,000.

It seems like this level has a certain power now, and the index would need some time to break out. Therefore, the index should undergo little correction and drop a bit.

Support is of course 38.2% at around 19,300.

However, if HSI breaks out, the next resistant will be at around 20,600 given by the purple Pitchfork on the graph.

A further resistant is at around 21,400. This is an extremely strong trend-line because the index has been moving below it for a pretty long time.

One thing worth mentioning is that the volume rose last week. This tells us that the surge was not likely to be a false one. Generally we can have better view on the index.

Weekly chart of HSI:















The orange Pitchfork is the usual one used before. We can see that the index just broke out the median line of the Pitchfork. This shows that we could not under-estimate the power of the rise.

Fibonacci retracement is the same as that on daily chart, giving the same support and resistant levels.

Another thing is that MACD and its EMA are touching each other. This is a possibility that a bullish trend will be suggested by the cross-over. But of course be aware of any false signal.

In general, for this week, I carry a more bearish view because of the very quick rise last week. Resistant levels are pretty strong now. So I think it would be trading within 19300 - 20300.

Good luck

Important Economic Data this week (2011-10-30)

31-Oct (Monday)
20:30 Canada GDP (YoY) {Forecast: Slight drop from 2.3% to 2.2%}

1-Nov (Tuesday)
09:00 China PMI Manufacturing {Forecast: Slight rice}
11:30 Reserve Bank of Australia Rate Decision {Forecast: Rise from 4.50% to 4.75}
17:30 UK GDP (YoY) {Forecast: Slight drop from 0.6% to 0.4%}

2-Nov (Wednesday)
16:55 Germany Unemployment Change {Forecast: Less negative}

3-Nov (Thursday)
00:30 US FOMC Rate Decision {Forecast: Unchanged at 0.25%}
02:15 Bernanke Speaks at Fed Press Conference
05:45 New Zealand Unemployment Rate {Forecast: Slight drop}
02:45 European Central Bank Rate Decision {Forecast: Unchanged at 1.50%}

4-Nov (Friday)
19:00 Canada Unemployment Rate {Forecast: Unchanged at 7.10%}
20:30 US Unemployment Rate {Forecast: Unchanged at 9.10%}

source: http://dailyfx.com

Any weakness? (2011-10-27 CCB analysis)

Above is the daily chart of China Construction Bank (0939.HK).

The price just broke out the green down-trend line which lasted for around 5 months. Such breakout signals a strong bullish trend.

Moreover, the orange Pitchfork indicates a more conservative movement prediction for the stock. The breakout of the green line also meant the breakout of the median line of the Pitchfork.

However, there is still one concern. The volume on breakout days didn't raise. This makes me feel bad and think this might be a weak breakout, which could not last long.

Nevertheless, if it drops, the Pitchfork and the down-trend line are considered supports now, which are at around 5.3 and 5.1.

Resistant is at around 5.6, the 38.2% fibonacci retracement level. The purple pitchfork is relatively steeper, we should take it as reference but not rely on it too much.

Any sign of weakness? (2011-10-26 VIX analysis)

It doesn't look like it would break below the lower red line, but the long inverted hammer pattern seemed to be a sign of weakness. Still pretty hard to guess its way.

How US Dollar goes (2011-10-25 DXY analysis)

Watch out of huge movement of US Dollar Index.

Coming is nice week (2011-10-24 HSI analysis)

Good news' coming out from Europe's crisis-management summit. European leaders agreed to outline a plan to help banks, and will discuss whether to expand European Financial Stability Facilities on Wednesday.

Last week basically was dominated by news around Europe debt problem. Hang Seng Index opened high on Monday, but then pared its losses and plunged in following four days.

VIX still has no sign of slumps in low levels. But it is still not at emergent times when volatility index keeps on climbing to new highs.

Let's get back to Hang Seng Index.

Daily chart of HSI:















The red down-trend line is basically how the index has been moving in these few weeks, starting from August 2011.

Last week the index attempted to break this red resistant line, but apparently it failed and fell back below this line, within the red channel.

Buy drawing a fibonacci retracement using the high and low within the red channel, we can see that 38.2% successfully resisted the index two weeks ago, and 23.6% supported the index well last week. These two are probably the important levels to look at in short period.

But in general, it is pretty clueless when looking at the daily chart alone.

Weekly chart of HSI:















The Pitchfork is just the normal one that I was using all time. We could see that last week the index was well supported by the lower line of the fork.

Besides, the 23.6% on this chart might somehow help support the index as well. This results in a pretty large supportive force at this area.

In fact, the index was resisted by the 10-day Simple Moving Average last week which therefore could not surge higher.

Combining the two charts, I somehow have a little bullish view in short-period this week. If the index rises, around 19,500 would be an extremely strong resistant. The index would need some power to break out.

For the down-side, around 18,000 will be a short term support. If the index breaks again, then there would be no immediate support.

Good luck.

Important Economic Data this week (2011-10-23)

24-Oct (Monday)
08:30 Australia Producer Price Index {Forecast: Slight drop}
15:30 Euro-Zone Purchasing Manager Index Composites {Forecast: Slight drop}

25-Oct (Tuesday)
05:45 New Zealand Consumer Prices Index {Forecast: Drop}
21:00 Bank of Canada Rate Decision {Forecast: Unchanged at 1.00%}
22:00 US Consumer Confidence {Forecast: Slight increase}

26-Oct (Wednesday)
08:30 Australia Consumer Prices Index {Forecast: Slight drop}
16:00 ECB Publishes its Bank Lending Survey
20:30 US Durable Goods Orders {Forecast: More negative}
22:00 Canada Monetary Policy Report

27-Oct (Thursday)
Bank of Japan Rate Decision
04:00 Reserve Bank of New Zealand Rate Decision {Forecast: Unchanged}
20:30 US GDP {Forecast: Increase from 1.3% to 2.5%}

28-Oct (Friday)
21:55 U. of Michigan Confidence {Forecast: Slight increase}

source: http://www.dailyfx.com