Is the Hang Seng Coiling its way to a breakout?
Looking across several timeframes suggest that the Hang Seng is moving towards a larger move, whilst prices coil on lower timeframes.
Share this:
Looking across several timeframes suggest that the Hang Seng is moving towards a larger move, whilst prices coil on lower timeframes.
Hang Seng Index (monthly chart):
We can see on the monthly chart that 18,000 has provided support since 2012, with the most recent low forming in March this year. The market rallied around 58% from the 2012 low and 85% from the 2016 low.
At this stage we do not know if this is a multi-year bullish continuation, or reversal pattern. If this is part of a head and shoulders top, we could assume that a break above 22,600 may top out below 28,650 (the left shoulders or 58% rally).
But if prices remain below 22,600 then we will be looking for a potential break below 18,000 to mark a major reversal. As this is the monthly chart we have time on our side.
Hang Seng Index (weekly chart):
When looking for a high conviction for potential direction, we’d prefer to see multiple timeframes align for the analysis. Yet that’s not what we are seeing on the weekly chart. Whilst the Hang Seng has printed a higher low from 18,000, it has met resistance at 22,574 support and a bearish trendline. A bearish hammer formed at this key level last week and the market is back below 22,000. The stochastic oscillator also shows the potential to provide a sell signal, so perhaps the Hang Seng to dip lower on the weekly chart.
Perhaps we may see the market coil between the two trendlines until a sustained move is seen in either direction. Ultimately we need to see a break above 22,600 to confirm the next leg higher, whilst a break of the lower trendline suggests momentum has realigned with the bearish trendline.
Hang Seng (daily chart):
The daily chart is currently holding above trend support and the 20/50-day eMA within a larger triangle.
- Whilst prices hold above 21,280 then it may provide bullish setups on lower timeframes, over the near-term.
- A break of yesterday’s low invalidates the near-term bullish bias and brings the lower trendline into focus for bears.
- Due to the conflicting inflation across the three timeframes, traders may want to remain nimble and not seek large swings until we see a break above 22,600 or below the lower trendline.
How to trade with City Index
You can easily trade with City Index by using these four easy steps:
- Open an account, or log in if you’re already a customer
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
- Search for the company you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log in if you’re already a customer.
- Search for the pair you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Related tags:
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Canadian Dollar Technical Outlook: USD/CAD Seven-Day Rally Tests Major Resistance 9 29 2026
USD/CAD is pressing into a major technical barrier after an extended advance, raising the risk for price inflection as momentum stretches.
RBA delivers 25bp hike, Bullock now the main event
The RBA delivered the expected 25bp hike, but Bullock’s press conference now looms as the bigger volatility risk for AUD/USD and the ASX 200.
Gold outlook: XAU/USD hammered, stretched and vulnerable to a sharp rebound
Gold is getting hammered for solid fundamental reasons, but history suggests extreme four-hourly oversold conditions can produce violent countertrend rallies.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.