hang seng index potential final downleg below 23750 resistance 1832842016
<p>Daily Outlook, Tues 04 Oct 2016 (Click to enlarge chart) What happened earlier/yesterday The Hong Kong 50 Index (proxy for Hang Seng Index futures) has […]</p>
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Daily Outlook, Tues 04 Oct 2016
What happened earlier/yesterday
The Hong Kong 50 Index (proxy for Hang Seng Index futures) has continued to evolve within a mini “symmetrical triangle” configuration in place since the 09 September 2016 high of 24406. As per highlighted in our latest weekly technical outlook published yesterday, 03 October, elements are still positive and the Index is likely to shape a potential bullish breakout from the aforementioned “symmetrical triangle” configuration (click here to recap).
So what is in store for today?
Key elements
- Based on the Elliot Wave Principal and fractal analysis, the Index is likely to be shaping the potential final downleg to complete the mini “symmetrical triangle” configuration with support at 23260.
- The short-term (hourly) Stochastic oscillator remains on a downtick and still shows room for further potential downside before it reaches an extreme oversold level. These observations suggest that short-term downside momentum remains intact that is likely to reinforce the expected further downleg in price action.
- Short-term key resistance stands at 23750 which is defined by the upper boundary of the mini “symmetrical triangle” configuration.
Key levels (1 to 3 days)
Pivot (key resistance): 23750
Support: 23260
Next resistance: 24070
Conclusion
As long as the 23750 short-term pivotal resistance is not surpassed, the Index is likely to shape a final potential downleg towards 23260 to end the one month old “symmetrical triangle” consolidation before another potential impulsive up movement cycle materialises.
On the other hand, a clearance above the 23750 short-term pivotal resistance may invalidate our preferred final push down scenario to trigger a bullish breakout towards the 24070 minor swing high in the first step.
Charts are from City Index Advantage TraderPro
Disclaimer
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