Hello Traders,
Hang Seng gaped down this morning, opened @ 26950 and closed the day @ 26918. This means a weekly loss of 5.21% (according to teletrader.com) and it is the largest loss since October 2018!
This all occurred with a a/d-Ratio of 3/47, meaning nearly all stocks were sold.
The Short Selling Ratio „declined“ to 18.554%. From my view, there is a divergence between the SSR and price, `cause at a low I expect the SSR to rise to new highs. To my conclusion, that means, that short sellers have closed and covered their position due to the weekend ahead!
Short term itis possible that a bottom has reached. Let`s check the 1h chart.
As you will observe at the chart, you see that the chart is highly fractured, which is not a good sign. A lot of massive gaps occurred and the index has declined to a wave „2“ level of lesser degree. Today's closing price is exactly at the level were wave „c“/“iii“=1.618 FibExtension of wave „a“!
It could be possible, that today's gap down was a „three of a three“.
Following this interpretation, the decline is not done short term and lower price is to expect. May after a short and sharp rebound, but this is not required.
The odds do increase, that an important high was in place @ 30280 and the next days will show weakening price for Hang Seng.
Have a great week.
ruebennase
Feel free to ask or comment.
Trading this analyze is at your own risk!
Hang Seng gaped down this morning, opened @ 26950 and closed the day @ 26918. This means a weekly loss of 5.21% (according to teletrader.com) and it is the largest loss since October 2018!
This all occurred with a a/d-Ratio of 3/47, meaning nearly all stocks were sold.
The Short Selling Ratio „declined“ to 18.554%. From my view, there is a divergence between the SSR and price, `cause at a low I expect the SSR to rise to new highs. To my conclusion, that means, that short sellers have closed and covered their position due to the weekend ahead!
Short term itis possible that a bottom has reached. Let`s check the 1h chart.
As you will observe at the chart, you see that the chart is highly fractured, which is not a good sign. A lot of massive gaps occurred and the index has declined to a wave „2“ level of lesser degree. Today's closing price is exactly at the level were wave „c“/“iii“=1.618 FibExtension of wave „a“!
It could be possible, that today's gap down was a „three of a three“.
Following this interpretation, the decline is not done short term and lower price is to expect. May after a short and sharp rebound, but this is not required.
The odds do increase, that an important high was in place @ 30280 and the next days will show weakening price for Hang Seng.
Have a great week.
ruebennase
Feel free to ask or comment.
Trading this analyze is at your own risk!