Hong Kong Hang Seng Index (HSI): In a major down trend correction

Like other markets in the region because of easing oil price, the HSI made a rebound after finding support at 21,000 points. It fell short to test the major support level at 20,000 points which I mentioned last month. The HSI rallied 2,000 points (about 10%) upwards before finding resistance at 23,370 points. The HSI pulled back in the last three days and on Monday 28th of July, the HSI closed at 22687.11 points.

The HSI is currently in a major down trend correction. It is between the short and long term averages. The short term 30 day average is currently at 22,250 points and the long term average is at 23,600 points. The HSI needs to break above the long term average level which is currently the immediate resistance to overcome the down trend strength. If the HSI fails to maintain above the 30 day average, the HSI may consolidate further sideways or continuing the down trend. At this moment, the upward rally is supported by good momentum.

Commentary and Analysis by Benny Lee