Connect with us

Hi, what are you looking for?


Hang Seng index technical outlook: Rebound is imminent

Hong Kong City Digital Connections

The Hang Seng index had a positive start of the week as investors reflected on the outcome of the China party congress during the weekend. The blue-chip index popped to a high of H$20,800, which was a few points above last week’s low of H$19,773. In this report, I will use technical analysis to predict whether the recent retreat is a reversal or just a pause.

Hang Seng index daily chart

On the daily chart, we see that the Hang Seng index pulled back when it tested the key resistance level at $22,727. This was an important level since it was the highest point on July 7 last year. A closer look shows that the index has formed an inverted head and shoulders pattern.

In price action analysis, this pattern is usually a bullish sign. The right shoulder is at the key support level at $19,165, which was the lowest point in May last year. Meanwhile, the index is still being supported by the 200-day exponential moving average while the Relative Strength Index (RSI) has moved close to the neutral point at 50.

Therefore, based on this technical chart, we can assume that the recent pullback is just temporary and that the bullish trend will resume in the coming days. This view will be confirmed if the Hang Seng index jumps to the key resistance level at H$21,500. A drop below the support point at $19,165 will signal that there are still more sellers in the market.

Hang Seng index

HSI index weekly analysis

The weekly chart shows that the Hang Seng index recent pullback happened after it rose above the 38.2% Fibonacci Retracement level. This is notable since financial assets tend to retreat when they test their key retracement levels. It remains below the 200-week moving average while the RSI has formed a bearish divergence pattern.

The Hang Seng index wants to retest the support at $19,165, which we pointed in the daily chart. In this chart, the price is at the 23.6% retracement level. Therefore, I suspect that the Hang Seng index will retreat slightly and then resume the bullish trend in the coming weeks. If this happens, the next level to watch will be at the 200-day exponential moving average at H$24,000.

Like in the daily chart, a volume-supported break below the support at $19,165 will signal that there are more sellers left in the market.

Hang Seng index

HSI chart by TradingView

The post Hang Seng index technical outlook: Rebound is imminent appeared first on Invezz.

You May Also Like


Inflation appears to be on the decline. The Personal Consumption Expenditures Price Index (PCEPI), which is the Federal Reserve’s preferred measure of inflation, grew...


Mimiq, Inc is announcing today the launch of their new product, Mimiq Track, at CES as part of their latest product line to operate...


On this week’s edition of Stock Talk with Joe Rabil, Joe looks at the longer-term picture for stocks like AAPL, TSLA, and more. He...

Latest News

Kevin McCarthy’s difficult road to becoming House speaker ended early Saturday morning after Republicans appeared to have miscounted the number of votes they needed...

Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2023