The Hang Seng Index has been running in the range of 27800 - 29000 since July.
Last Friday, we saw a +400 points of strong rebound after hitting a lower low of 27745.
The daily turnover has also increase from 70 billion to 100 billion, which may indicate support and potential reversal.
From the 1-hour chart, we see that the index has reached the top of the downward trendline, i.e. around 28220.
The next trading day would be critical. If the index goes beyond 28330 (top of downward trendline of 1-hour chart with wick), we may see a breakout pushing the index further to the next resistance level.
From the chart, we also see levels and levels of resistance ahead if the index goes up.
During a time which the trade war is progressing and China is under heavy capital control, we do not think that the index would break through these resistance levels.
Our trading strategy:
- SHORT position if the index does not stand above 28330.
- If the index goes beyond 28330, monitor at resistance levels and look for SHORT position
- The target would be around 27330, which is 1000 points from 28330.
Feel free to leave comments / share your idea!
Last Friday, we saw a +400 points of strong rebound after hitting a lower low of 27745.
The daily turnover has also increase from 70 billion to 100 billion, which may indicate support and potential reversal.
From the 1-hour chart, we see that the index has reached the top of the downward trendline, i.e. around 28220.
The next trading day would be critical. If the index goes beyond 28330 (top of downward trendline of 1-hour chart with wick), we may see a breakout pushing the index further to the next resistance level.
From the chart, we also see levels and levels of resistance ahead if the index goes up.
During a time which the trade war is progressing and China is under heavy capital control, we do not think that the index would break through these resistance levels.
Our trading strategy:
- SHORT position if the index does not stand above 28330.
- If the index goes beyond 28330, monitor at resistance levels and look for SHORT position
- The target would be around 27330, which is 1000 points from 28330.
Feel free to leave comments / share your idea!
Comment:
Entry: Short below 28550
Comment:
Take Profit Target updated to 27550 (1000 points from 28550)
Trade closed: stop reached:
The Index went to a low of 27578, but it did not reach the TP at 27550.
Trade closed.
Trade closed.
The Hang Seng Index did not follow SHCOMP and the bears defended the 28330 level a few times during the trading day.
In the afternoon, the index went weak after the surge of USDCNY, i.e. devaluation of RMB, and eventually closed with +0.11% (31 points)
Tomorrow we will still be monitoring at the downward trendline and the critical 28330 level.