hang seng index weekly outlook for 16 mar to 20 mar push up before potential intermediate bearish tr

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What happened last week

The Hong Kong 40 Index (proxy for the Hang Seng Index) has traded sideways below the 24630 weekly pivotal support. Please click on this link for more details on our previous weekly outlook.

Key elements

• The Index has remained below the 25000/25150 long-term significant resistance in place since the November 2010 swing high (see weekly chart).
• The upper and lower boundaries of the ascending channel (in orange) in place since 25 June 2013 stands at 26400/26750 and 23450/23300 respectively (see daily chart).
• The 23450/23300 support also corresponds closely with the 61.8% Fibonacci retracement from 16 December 2014 low to 05 February 2015 high (see daily chart).
• The intermediate term RSI oscillator remains bearish below its resistances (see daily chart).
• The 24630/24280 resistance zone corresponds closely with the 50% and 61.8% Fibonacci retracement from 27 February 2015 high to  11 march 2015 low (see 4 hour chart).
• The short-term Stochastic oscillator has already exited from its oversold region and still has “room” for further upside before reaching its “extreme” overbought level. This observation suggests the risk of a short-term push-up in price action (see 4 hour chart).

Key levels (1 to 3 weeks)

Intermediate resistance: 24280

Pivot (key resistance): 24630

Support: 23450/23300

Next resistance: 25000/25150

Conclusion

Technical elements remain bearish on the intermediate term (multi-week). However, we are still in favour of a potential short-term push up to test the intermediate resistance at 24280 with a maximum limit set at the 24630 weekly pivot resistance. Thereafter, the intermediate term bearish trend is likely to resume towards the long-term support zone of 23450/23300.

On the other hand, a break above 24630 may invalidate the bearish trend to see a rise to retest the 25000/25150 long-term significant resistance.

Disclaimer

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