[VIDEO] Hang Seng breaks neckline of Head and Shoulders formation

On Wednesday, the index broke through the neckline of the formation

Downtrend 1

The Hang Seng put in a high this year on February 18th, at 31,088, as price and the RSI began to diverge, while the RSI was in overbought territory.  The Hang Seng then pulled back and formed a head and shoulders pattern.  On Wednesday, the index broke through the neckline of the formation and fell to the 38.2% Fibonacci retracement level from the lows of September 28th, 2020 to the highs of February 18th, near 27,898. 

The target for a head and shoulders pattern is the distance from the head to the neckline, added to the breakdown point below the neckline, which is near 25,370

If geopolitical and trade tensions between China and other countries remain, the Hang Seng may continue towards the head and shoulders target near 25,370

Learn more about index trading opportunities.


 

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.