hang seng index daily outlook for thurs 20 aug at key inflection level of 2271022620 1075992015
What happened yesterday
The Hong Kong 40 Index (proxy for the Hang Seng Index) has plummeted and hit the expected downside target at 22870/22710.
Please click on this link for a recap on our previous daily outlook.
Key elements
- Current price action has formed an impending hourly bullish “Dragonfly Doji” candlestick pattern at the 8 July 2015 key reversal swing low of 22710.
- The 22710 significant swing low also confluences closely with the 1.236/1.382 Fibonacci projection from 21 July 2015 high @1pm to 11 August 2015 high @9am.
- The hourly Stochastic oscillator has just exited from the oversold region which suggests that the current decline is being overdone and a potential rebound is round the corner for the Index.
- The short-term steeper trendline resistance joining the highs since 11 August 2015 @9am is now capping the Index at 23490.
Key levels
Pivot (key support): 22710/22620
Resistance: 23490/23650
Next support: 22250/21170
Conclusion
Short-term technical elements are advocating for a potential push up towards the 23490/23650 resistance zone holding above the 22710/22620 pivotal support.
However, a crack below the 22710/22620 significant support is likely to see the continuation of this pronounced decline to target 22250/21170 next.
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