Hang Seng Index: Gap Up and Breaks Above an Important Declining Trend Line
Medion Jim November 4, 2020 9:01 PM
The Hang Seng Index rebounds around 9% from September low, while China's Shanghai Composite Index bounces 3%
The Hang Seng Index rebounds around 9% from September low, while China's Shanghai Composite Index bounces 3%. It suggests that the short term momentum of the Hong Kong market is stronger than the China's market.
On the economic front, Caixin China Service PMI rose to 56.8 in October (55.0 expected) from 54.8 in September. Key findings included: "Business activity expands at second-steepest rate since August 2010 (...) Total new order growth accelerates despite further dip in export sales (...) Business confidence improves to highest level since April 2012." Besides, China President Xi Jinping said China would be able to double the GDP by 2035.
On a daily chart, the Hang Seng Index opened a second gap and broke above a declining trend line drawn from 2020 top, suggesting a strong bullish reversal signal. The RSI also broke above a falling trend line drawn from July.
Bullish readers could put the nearest support level at 24500 (the gap occurred on November 3), while the resistance levels would be located at 25850 and 26780.
Source: GAIN Capital, TradingView
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.