Technical Pulse: Hang Seng Index June 20, 2018 607

Hang Seng Index – Daily timeframe

Current Sentiment: Bearish

Support 1: 29,459                Resistance 1: 31,094

Support 2: 29,129                Resistance 2: 31,799

The Hang Seng Index (HSI) has been trading sideways for the past five months as it oscillates between the 31,799 range high and 29,459 range low. The recent selloff since early June has once again brought price back to the critical range low. Watch this 29,459 – 29,129 range low closely to see if it holds or breaks.

A bearish break and close below the 29,459 – 29,129 range low would signal further downside as the bearish momentum gathers speed. Under this scenario, the HSI could be targeting the 28,224 support area.

However, looking at the Relative Strength Index (RSI) signals a reversal back into the range. RSI measures momentum. A reading above 70 represents overbought condition while a reading below 30 represents oversold condition. With the recent bearish momentum, the RSI is hovering near the oversold condition, currently at 34 suggesting for limited downside and for the 29,459 – 29,129 range low to hold.

For further confirmation, watch out for bullish price action bars near the 29,459 – 29,129 range low for the bullish reversal signal.

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About the author

Profile photo of Jeremy Ng

Jeremy Ng
Research Analyst
Phillip Securities Research Pte Ltd

Jeremy specialises in Technical Analysis and has 10 years of experience in studying price action. His areas of expertise include intermarket analysis on the equities, currencies, commodities and bonds market.

He is also a regular columnist on The Business Times - every Monday ChartPoint column.

He graduated with a Bachelor of Science in Banking and Finance from University of London.

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