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Technical Analysis – Hong Kong 50 Index bearish bias in place

HK50 08/06/18 | EconAlerts

Hong Kong 50 Index slides back inside symmetrical triangle; bearish bias in place.

The Hong Kong 50 Index is having a rough ride today, extending the negative momentum below the 20-day simple moving average (SMA). While the index jumped above the symmetrical triangle in the previous two days it failed to extend gains towards the 32,000 resistance level and reversed back down. Technical indicators point to further downside movements in the short-term.

The RSI indicator continues to fluctuate near the 50 level and is currently moving downwards, meaning that the risk is tilted to the downside. The fast stochastics are also negatively sloped, while it recorded a bearish cross in the overbought zone, suggesting further losses.

Should the market stretch lower, support could come first at around 30,000 near the ascending trend line before the focus shifts to 29,740 a frequently congested area during May. A drop below this area, could raise bearish sentiment and drive the index further down to the 29,100 level, taken from the low on April 4.

On the other side, if the market rebounds, resistance could be found around the 31,620 hurdle. A close above the symmetrical triangle could decisively fuel bullish sentiment. In this case, the door could open to the 32,000 key-mark.

Turning to the medium-term picture, the index has been holding within a symmetrical pattern since December 2017. However, the neutral picture could be about to change as the price has been making several attempts in recent weeks and come close to breaking outside of the triangle.

HK50 08/06/18 | EconAlerts



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source: XM

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