hang seng index daily outlook for thurs 04 sep 21400 remains the resistance to maintain the bearish

(Click to enlarge chart)

What happened earlier

The Hong Kong 40 Index (proxy for the Hang Seng Index) has continued to trade below the 21400 daily pivotal resistance and it was closed for a public holiday yesterday.

Please click on this link for a recap on our previous daily outlook.

Key elements

The Index remains below a descending trendline (in pink) joining the highs since 11 August 2015 now acting as a resistance at 21400.
The hourly (short-term) RSI remains below its resistance and 50% neutrality level.
Based on the Elliot Wave Principal, the Index has started to trace out a bearish impulsive 5- wave structure of a lower degree from the wave 4/. The typical 5^th wave price projection (0.618 Fibonacci) of this lower degree bearish impulsive wave stands at 20380 which is neared to the closing price of the 24 August 2015 hourly candle at 20450.

Key levels (1 to 3 days)

Pivot (key resistance): 21400

Support: 20450 & 20070 (weekly target)

Next resistance: 22250

Conclusion

As long as the 21400 daily pivotal resistance is not surpassed, we are maintaining our bearish bias for a potential last push down to test the 20450 support and even 20070 next.

On the other hand, a break above the 21400 pivotal resistance is likely to damage the bearish tone to see a squeeze up towards the next resistance at 22250 (short-term 25/27 August 2015 range top).

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