as I wrote of my last analyse on Dec. 15 the bottom at Hang Seng has been attacked but Sellers who try failed. HS bounced after a long decline to a Fibonacci of ~0.59 within a series of Gap`s up and down. The last low at 24540.63 is valid still and as long it is this we face a multi month advance for HS the time ahead. This low is counted as a wave 2 (Minor) on a daily basis.
On a short term basis I have label the count as a wave ((i)) and a following (a)-(b)-(c) -flat pattern which developed as an expanding. Notice how perfect price have met the lower line of the trendchannel, drawn in log scale, and bounced to the upside after. The a/d-Ratio on Fridays session has risen to a „sky-rocketing“ level of 8.04 which is the highest since Jan.2016!
So the odds are to favor, no matter if one more fresh new low will occur or not, that we are at the start of a wave 3 of Minor degree.
Notice also that Vola for HS is still declinging to 22.96 at the last session, going forward after a „peaking process“ that started in early January of 2016. If the bulls will take order again, we will face much lower levels for Vola of HS in the coming month ahead.
Observing the lower trime frame (here 120 min chart) we will see that we have, once again, another divergence for and price still.
The first divergence occured during the decline to 24540.60. HS made a fresh low during its wave „a“ of ((ii)) decline. That day was still advancing for nearly three weeks and send a first signal for an „exhausting“ selling pressure!
The second divergence occured just in time as HS was declining within a wave „c“ of ((ii)) with the same characteristic. Once again, another signal and indikation for exhausting selling pressure.
So it will be interesting in the coming days and weeks ahead to observe how HS will develop.
For the short term I see a price target around the level of 25799-25920 where a Fibonacci of 0.382 is in place and a wave 4 of lesser degree too. Next what will be come into focus is the decling (blue) that connect the level of 28579-28533-28031 and the Fibonacci of 0.618 at 26357. These are the targets.
Any decline to fresh new low has the consequence that the count must be adjusted. But from my perspective for now, there will be no need to change the one to a one!
The message seems to be clear for HS!
A possible wave 3 of Minor degree is in its early stages and will bring back higher prices still with a change of social mood!
Have a great week.....
Feel free to ask or comment.
Trading this analyze is at your own risk!