Hello Traders,
some interesting pattern occurs this morning.
Hang Seng open on Oct. 24 with a massiv gap-down to 24766 and set the stage for a „final (?) low at 24540.60 on Oct. 30. Since this move down, there remains an open gap which was followed this morning by a gap-up to 25228. This pattern indicate a potencially reversal, as long as the low at 24540 is valid. „Island-reversal-pattern" often occurs at this position at chart after a long-term downmove. So watch the market for a sharp reversal within the next days above 24540!
From an EW perspective there are serveral possibilities to count this.
One that I have visualized at chart is, that the move down from 33484 to 24540 is a wave 4 of Minor degree. This correction has retrace a bit more than the 0.618 Fibonacci of wave 2-3! While wave 4 correction rarely retraced this level, it is still valid, but it is one of the less probable cases.
A second alternate count is, that this move was a 1-2 of one lower degree, indicating new highs in the next weeks and month.
One early sign is the return of price back into the blue trendchannel, to observe at the daily chart. This would open the door the important 28000 area.
Important short-term is the level at 24540. This must be the low for the bullish case.
Any drop below this would make this forecast invalid!
Have a great week...
ruebennase
some interesting pattern occurs this morning.
Hang Seng open on Oct. 24 with a massiv gap-down to 24766 and set the stage for a „final (?) low at 24540.60 on Oct. 30. Since this move down, there remains an open gap which was followed this morning by a gap-up to 25228. This pattern indicate a potencially reversal, as long as the low at 24540 is valid. „Island-reversal-pattern" often occurs at this position at chart after a long-term downmove. So watch the market for a sharp reversal within the next days above 24540!
From an EW perspective there are serveral possibilities to count this.
One that I have visualized at chart is, that the move down from 33484 to 24540 is a wave 4 of Minor degree. This correction has retrace a bit more than the 0.618 Fibonacci of wave 2-3! While wave 4 correction rarely retraced this level, it is still valid, but it is one of the less probable cases.
A second alternate count is, that this move was a 1-2 of one lower degree, indicating new highs in the next weeks and month.
One early sign is the return of price back into the blue trendchannel, to observe at the daily chart. This would open the door the important 28000 area.
Important short-term is the level at 24540. This must be the low for the bullish case.
Any drop below this would make this forecast invalid!
Have a great week...
ruebennase