Hang Seng Future seem to be in a new upleg, while it is consolidating on a very short term basis after rising 900 pts in 3 days early last week. A good upleg should make a new high, trading above Oct high of 25000.
On longer term basis, Hang Seng is still on an uptrend and no clear signal of top occurring just yet (chart 2 & 3) while a new upleg likely started in mid Dec as: 1)price found support on trendline, 2) price is back above its moving average, 3) RSI too found support, and 4) supportive candle formation during that period.
Therefore, the low of around 22500 will be an important support level going forward. An uptrend should see at least at minimum 3 more weeks of higher prices while a price below it may see trend turning weaker.
Meanwhile, in the shorter term, price is in consolidation range of 24200 – 24400 and price may trend on direction of break. Price may break up given current uptrend and positive sentiment, futures was traded at premium to cash all last week but nontheless resistance has to be violated first.
Note too that RSI is correcting fast (chart 1), increasing the probability of false breakout on the downside. Should price break down, a consecutive closes below 24200 likely confirm the break. A minor pullback likely send price to around 2400 – 23850 based on Fibonacci while stronger support is expected at around 23700 – 23500.
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