Hang Seng Index Breaks The Short-Term Downside Line | Technical Analysis
The technical picture of the Hang Seng index on our daily chart shows that the price had broken the short-term tentative downside resistance line taken from the high of February 18th. Overall, the index continues to trade above a medium-term tentative upside support line drawn from the low of September 25th. But despite the positive signals mentioned above, Hang Seng is stalling just slightly below the psychological 29000 mark, which marks the high of March 23rd. In order to get comfortable with further advances, a break above that barrier is needed, that’s why we will stay somewhat positive for now.
If, eventually, the index does overcome the psychological 29000 barrier, this might open the door for further advances, possibly bringing Hang Seng to the 29572 hurdle, marked by the high of March 18th. The price might stall there for a while, however, if the buying doesn’t stop there, the next potential target could be at 29876, or at 30395, which is the high of February 25th.
The RSI is currently above 50 and points higher. The indicator clearly shows rising upside speed of the price. The MACD is still below zero, but started pointing higher and had recently climbed above the trigger line. The combined picture of the RSI and the MACD supports our carefully-positive approach for now.
Alternatively, if the index moves sharply lower, breaks the previously discussed upside line and then falls below the 27500 hurdle, marked by the lowest point of March, this might attract more sellers into the game, as a forthcoming lower low would be confirmed as well. Hang Seng could then slide to the 27070 obstacle, a break of which may lead to a test of the 26705 level, marked by the highs of December 9th, 11th and 17th.
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