HSI’s technical landscape has improved substantially since our previous update less than a month ago. The index had extended higher very quickly after violating the 9-month downtrend line on 17 Sept 2010. The HSI is now even trading at the highest level since the massive rally started from March 2009.
To re-cap, the breakout marked a major shift in trend as the market had been confined within the “Descending Triangle” for about 9 months. The breakout not only violated the resistance line of the triangle but also took out the previous major peak at the 21,805.94 pt-level.
The rally over the last one month basically reaffirms our bullish view as the index has continued to extend its uptrend since violating the major downtrend line.
We have identified three levels at which the HSI might face challenges. The first resistance is detected at the 23,867 pt-level, followed by the 25,000-pt and 25,201 pt-level. As the breakout from the 9-month downtrend line signals a major violation, this kind of major breakout would normally lead to a rally lasting a few months.
To the downside, there is initial support at the 23,307 pt-level, followed by the 23,000 pt-level. We maintain our bullish view towards the HSI after it took out the 9-month downtrend line.
To re-cap, the breakout marked a major shift in trend as the market had been confined within the “Descending Triangle” for about 9 months. The breakout not only violated the resistance line of the triangle but also took out the previous major peak at the 21,805.94 pt-level.
The rally over the last one month basically reaffirms our bullish view as the index has continued to extend its uptrend since violating the major downtrend line.
We have identified three levels at which the HSI might face challenges. The first resistance is detected at the 23,867 pt-level, followed by the 25,000-pt and 25,201 pt-level. As the breakout from the 9-month downtrend line signals a major violation, this kind of major breakout would normally lead to a rally lasting a few months.
To the downside, there is initial support at the 23,307 pt-level, followed by the 23,000 pt-level. We maintain our bullish view towards the HSI after it took out the 9-month downtrend line.
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