hang seng index daily outlook tues 13 oct potential bullish breakout above 22475 support 1560642015
<p> (Click to enlarge chart) What happened earlier The Hong Kong 40 Index (proxy for the Hang Seng Index) has traded sideways yesterday. Key elements […]</p>
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(Click to enlarge chart)
What happened earlier
The Hong Kong 40 Index (proxy for the Hang Seng Index) has traded sideways yesterday.
Key elements
- The Index has shed 0.7% from yesterday’s high of 22651 seen in the overnight U.S. session to a current low of 22475 printed today.
- Despite its weak opening, the Index is still holding above the short-term support at 22475 which is the lower boundary of a short-term triangle range consolidation pattern (in pink) in place since the 07 October 2015 high.
- The Index is now coming close to the apex of the triangle range consolidation pattern where a price action breakout is likely to occur soon.
- The hourly (short-term) Stochastic oscillator has started to inch upwards from its oversold region which suggests a revival in upside momentum.
- The significant short-term resistances will be at 22890 and 23170 which are defined by the 0.618/ 0.764 Fibonacci projection of the 29 September 2015 low to 06 October 2015 low @1pm.
Key levels (1 to 3 days)
Pivot (key support): 22475
Resistance: 22890 & 23170
Next support: 22260/22180 (weekly pivot).
Conclusion
As long as the 22475 daily (short-term) pivotal support holds, the Index is likely to shape a potential bullish breakout from its triangle range pattern to target 22890 before 23170.
However, failure to hold above the 22475 short-term pivotal support may negate the bullish tone to see a slide towards the 22260/22180 weekly pivotal support (pull-back support of the “Double Bottom” bullish breakout).
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