hang seng daily outlook wed 01 june 2016 maintain bearish bias below 21100 resistance 1813822016
<p>(Click to enlarge chart) What happened earlier/yesterday The Hong Kong 50 Index (proxy for the Hang Seng Index future) has pushed up (printed a high […]</p>
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What happened earlier/yesterday
The Hong Kong 50 Index (proxy for the Hang Seng Index future) has pushed up (printed a high of 20998) and staged the expected bearish reaction below 21100 medium-term pivotal resistance.
During the U.S session, the Index has continued its slide and printed a low of 20699 which translated into around a 70% wipe out of the early gains seen in the Asian session.
Please click on this link to recap our previous daily short-term outlook/strategy.
Key elements
- Yesterday’s the rally has stalled right at the descending trendline resistance in place since 26 October 2016 high which is just below the 21100 medium-term pivotal resistance set for this week.
- The near-term supports remain at 20500 (minor swing low of 30 May 2016 + pull-back support) follow by 20270 (50% Fibonacci retracement of the current rally from 19 May 2016 low to 31 May 2016 high of 20998).
- The hourly (short-term) RSI remains bearish below its pull-back resistance which suggests that short-term downside momentum of price action remains intact.
Key levels (1 to 3 days)
Pivot (key resistance): 21100
Supports: 20500 & 20270
Next resistance: 21650
Conclusion
Maintain bearish bias. As long as the 21100 pivotal resistance is not surpassed, the Index is likely to see a further decline to test the 20500 support in the first step.
On the other hand, a clearance above the 21100 pivotal resistance is likely to open up scope for a further rally towards the next resistance at 21650 (21/28 April 2016 swing high area).
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