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Featured Trade: Potential bullish reversal for Hang Seng

Short-term technical outlook on Hang Seng/Hong Kong 50 Index (Tues 16 Apr)



click to enlarge charts

Key technical elements

  • The Hong Kong 50 Index (proxy for Hang Seng Index futures) has staged a decline of 2% to print a low of 29660 seen in yesterday, 15 Apr U.S. session from its 15 Apr Asian session high of 30296. Interestingly, yesterday’s pull-backed in price action has managed to hold right above the 29500 key medium-term pivotal support as per highlighted in our latest weekly technical outlook report (click here for a recap).
  • Short-term elements have turned bullish where the 4-hour Stochastic oscillator has just inched up from its oversold region coupled with a bullish divergence signal seen in the 1-hour Stochastic oscillator after it hit an extreme oversold level.
  • Current price action has surpassed yesterday, 15 Apr U.S. session high area of 29820 now turns into a near-term support.

Key Levels (1 to 3 days)

Intermediate support: 29820

Pivot (key support): 29500

Resistance: 30500/600 (Fibonacci expansion cluster)

Next support: 28470

Conclusion

If the 29500 key medium-term pivotal support continues to hold, the Index is likely to see a further potential up move to target the next intermediate resistance at 30500/600 in the first step.

However, failure to hold at 29500 invalidates the bearish scenario to kickstart a multi-day corrective decline towards the next support at 28470 (26 Mar 2019 minor swing low)

Charts are from City Index Advantage TraderPro



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