Hang Seng....The bulls leave the hiding place?!

Hello Traders,
Hang Seng has dropped on a weekly basis to fresh new lows, but reversed at Friday`s session sharply after disappointing data of economic. This behavior indicates, on an Elliott wave perspective, that as bad as the news are, a important bottom could be in place. Both lows that last occur (on a weekly basis) are able to build a” double-bottom at 25090 -251125. These are the short-term important levels for a market reversal to the upside. Observe the blue trend channel at chart, which I marked days ago as important. Prices has dropped below the lower channel line. This often occurs at the end of a correction and will be a “fail-breakout” to the down side. If so, the first hurdle to be overcome is at 258xx, closing price as of last week, and thereafter the high of the previous candle at 26717!
On a daily basis, Hang Seng has to return into the blue trend-channel. The lower boundary-line crosses ~257xx area on Monday, which is shy below the closing price of last week. So, two important price levels have been set short-term and we have to watch the market closely for this zone. One possibility to kick the bears out of the market, is to “gap-up” on Mondays session indicating an “Island-reversal” pattern, which will be the kick-off for a new run to the upside. Island-reversal-pattern occurs not randomly, while other Gap`s don`t do this too. They are carrying a message in itself. So, it will be interesting to see, how Hang Seng is coming off the weekend.
If Hang Sang is not done to the downside, a potential target is around 24932 area, which is the 1.618 Fib Extension of wave ((a)) of the decline. This is a common target for a wave “c” within a flat-pattern.
Have a great week...

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Trading this analyze is at your own risk!

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