Weekly Technical Outlook on Major Stock Indices 13 May to 17 May 2019 Part 2

Hang Seng – Further potential decline to test key medium-term support

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Key Levels (1 to 3 weeks)

Intermediate resistance: 29060

Pivot (key resistance): 29500

Supports: 27290 & 26140

Next resistances: 30300 & 31200/300

Medium-term (1 to 3 weeks) Outlook

The Hong Kong 50 Index (proxy for Hang Seng Index futures) has staged the expected decline and met the first support/target at 28000 as per highlighted in our previous weekly outlook report (click here for a recap).

No change, maintain bearish bias with a tightened key medium-term pivotal resistance at 29500 in any bounces for a further potential decline to target the next supports at 27290 and 26140 (76.4% Fibonacci retracement of the entire up move from 03 Jan 2019 low to 03 May 2019 high & close to the ascending trendline in place since 26 Oct 2018 low).

On the other hand, a clearance with a daily close above 29500 invalidates the bearish scenario for a push up to retest last week high of 30300 and even another impulsive up move towards the next resistance at 31200/300 (Fibonacci expansion cluster).

ASX 200 – 6400 remains the key resistance to watch

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Key Levels (1 to 3 weeks)

Intermediate resistance: 6320

Pivot (key resistance): 6400

Supports: 6180 & 6095

Next resistance: 6495

Medium-term (1 to 3 weeks) Outlook

The Australia 200 Index (proxy for the ASX 200 futures) has traded sideways below the 6320 intermediate resistance as Australia goes to the polls on next Sat, 18 May for her federal election.

No change, 6400 remains as the key medium-term pivotal resistance for the start of a potential multi-week corrective decline to target the next supports at 6180 and 6095 in the first step.

On the other hand, clearance above 6400 with a daily close above invalidates the bearish scenario to revive the bulls for a push to towards the next resistance at 64950

DAX – Medium-term uptrend at jeopardy of reversing down

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Key Levels (1 to 3 weeks)

Intermediate resistance: 12200

Pivot (key resistance): 12450

Supports: 11800/700 & 11315

Next resistance: 12800

Medium-term (1 to 3 weeks) Outlook

The Germany 30 Index (proxy for the DAX futures) has dropped lower as expected and broke below the 12100 level yesterday, 09 May. The medium-term uptrend of the Index in place since 26 Dec 2018 is now at risk of breaking down. The break below 12100 has led the Index to reintegrate below the major descending resistance from its 23 Jan 2018 all time high that has suggested a potential failure bullish breakout earlier on 17 Apr 2019. In addition, the daily RSI oscillator has broken down below a significant corresponding support at the 50 level which indicates a built-up in medium-term downside momentum.

No change, maintain bearish bias with 12450 as key medium-term pivotal resistance for a further potential push down to test the 11800/700 (also the medium-term ascending channel support from 26 Dec 2018) and a break with a 4-hour close below 11700 opens up scope for a potential multi-week corrective decline to target the next support at 11315 (also the 50% Fibonacci retracement of the entire up move from 26 De 2018 low to 03 May 2019 high).

On the other hand, a clearance with a daily close above 12450 invalidates the bearish scenario for a continuation of the impulsive up move to towards the next resistance at 12800 (swing high of 27/31 Jul 2018 & Fibonacci expansion/retracement cluster).

Charts are from City Index Advantage TraderPro