hang seng index daily outlook wed 07 oct 22260 is the key resistance to watch for a potential drop 1
<p>(Click to enlarge chart) What happened yesterday The Hong Kong 40 Index (proxy for the Hang Seng Index) has managed to push higher during the […]</p>
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What happened yesterday
The Hong Kong 40 Index (proxy for the Hang Seng Index) has managed to push higher during the European/U.S. sessions but remained below the 22260 range top (weekly pivotal resistance).
Key elements
- This morning’s rally is now testing the short-term pull-back resistance (in dotted red) of the former trendline support joining the lows since 29 September 2015 just below the 22260 weekly pivotal resistance (range top in place since 25 August 2015.
- The hourly (short-term) Stochastic oscillator has reached its overbought region which suggests limited upside potential in price action at this juncture.
Key levels (1 to 3 days)
Pivot (key resistance): 22260
Support: 21710 & 21325
Next resistance: 23500
Conclusion
As long as the 22260 key pivotal resistance is not surpassed, the Index is likely to see a potential drop towards 21710 before 21325.
However, a clearance above the 22260 pivotal resistance may invalidate the medium-term (1 to 3 weeks) bearish “push down” scenario to kick start a “Double Bottom” bullish breakout for a rally to target the next resistance at 23500 in the first step.
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