Although we have not updated the HSI for a while, the market’s near-term technical outlook still remains firmly bullish. To re-cap, the index experienced a major breakout from the mid-term downtrend line in September and that breakout, as mentioned many times previously, had drastically improved its technical landscape. Since then, the HSI has been rising and in the process, constructed an uptrend line, which is portrayed in the above daily chart.
The importance of this uptrend line was confirmed last month when the HSI rebounded right above the trend line. Although it does look like the index could be creating a lower high after experiencing the retracement in recent weeks, everything would be fine for the market as long as it stays at above the uptrend line.
Hence, our near-term view towards the HSI is very straightforward. We will maintain our bullish view until the uptrend line is violated.
From the current level, there is immediate support at the 23,481 pt-level, followed by the 22,782 ptlevel and the 22,392 pt-level. We think a break below 22,000 pts would be sufficient to confirm a shift in the short-term trend. To the upside, an initial resistance lies at the 24,434 pt-level, followed by the 24,988 pt-level, or last year’s peak.
The importance of this uptrend line was confirmed last month when the HSI rebounded right above the trend line. Although it does look like the index could be creating a lower high after experiencing the retracement in recent weeks, everything would be fine for the market as long as it stays at above the uptrend line.
Hence, our near-term view towards the HSI is very straightforward. We will maintain our bullish view until the uptrend line is violated.
From the current level, there is immediate support at the 23,481 pt-level, followed by the 22,782 ptlevel and the 22,392 pt-level. We think a break below 22,000 pts would be sufficient to confirm a shift in the short-term trend. To the upside, an initial resistance lies at the 24,434 pt-level, followed by the 24,988 pt-level, or last year’s peak.
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