Hong Kong - Hang Seng (HASE.NDX)

Short term

Hong Kong - Hang Seng has broken the falling trend channel in the short term and reacted strongly up. For the time being, it is difficult to say anything about the future trend direction. The price has risen strongly since the positive signal from the inverse head and shoulders formation at the break through resistance at 17893. The objective at 19719 is now met, but the formation still gives a signal in the same direction. There is no resistance in the price chart and further rise is indicated. In case of a negative reaction, the index has support at approximately 18000 points. Positive volume balance indicates that volume is high on days with rising prices and low on days with falling prices, which strengthens the index. Trading volume has increased substantially lately, which may be because of fundamental news. RSI above 70 shows that the index has strong positive momentum in the short term. Investors have steadily paid more to buy the index, which indicates increasing optimism and that the price will continue to rise. However, particularly for big stocks, high RSI may be a sign that the stock is overbought and that there is a chance of a reaction downwards. The index is overall assessed as technically positive for the short term.

Recommendation one to six weeks: Positive

Medium term

Hong Kong - Hang Seng has broken through the ceiling of a falling trend channel in the medium long term. This indicates a slower falling rate initially, or the start of a more horizontal development. The price has risen strongly since the positive signal from the inverse head and shoulders formation at the break through resistance at 17893. The objective at 19719 is now met, but the formation still gives a signal in the same direction. There is no resistance in the price chart and further rise is indicated. In case of a negative reaction, the index has support at approximately 19600 points. Positive volume balance, with high volume on days of rising prices and low volume on days of falling prices, strengthens the index in the short term. RSI is above 70 after a good price increase the past weeks. The index has strong positive momentum and further increase is indicated. However, particularly for big stocks, high RSI may be a sign that the stock is overbought and that there is a chance of a reaction downwards. The index is overall assessed as technically positive for the medium long term.

Recommendation one to six months: Positive

Long term

Hong Kong - Hang Seng has broken through the ceiling of a falling trend channel in the long term. This indicates a slower falling rate initially, or the start of a more horizontal development. The index has support at points 14800 and resistance at points 22600. Positive volume balance indicates that buyers are aggressive while sellers are passive, and strengthens the index. The RSI curve shows a rising trend, which could be an early signal of the start of a rising trend for the price as well. The index is overall assessed as technically slightly positive for the long term.

Recommendation one to six quarters: Weak Positive