Fundamental Overview
The PBoC tonight announced new easing measures which included further rate cuts and stock buyback funding. Moreover, we got some positive economic data with Retail Sales and Industrial Production beating expectations by a big margin. These catalysts might see dip-buyers piling into the market again after last week’s big correction.
Hang Seng Index Technical Analysis – Daily Timeframe
On the daily chart, we can see that the price bounced around the 20K level where we had also the 50% Fibonacci retracement level. The area between the 20000 and 19600 level is a strong support zone for the buyers. The target should be a new cycle high. The sellers will want to see the price breaking below the support zone to increase the bearish bets and extend the drop into the 18200 level next.
Hang Seng Index Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the bounce today following the new Chinese easing measures. The first target for the buyers should be the swing level at 21635, which is what they will need to break to increase the bullish bets into new highs. The sellers, on the other hand, will likely lean on the swing level to position for a drop back into the 20K support zone.
Hang Seng Index Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price broke through the downward minor trendline today. This could be a signal of a change in momentum. Moreover, the price rallied to the top of today’s average daily range already, so we might not see new highs today.
Nonetheless, the buyers will want to see the price rising back above the 20781 level to keep targeting new highs, while the sellers will likely pile in around these levels to position for a drop back into the 20K support zone.
