HSI rebounded from 61.8% FIB retracement level, may face resistance

About a month ago, I comment that the HSI is heavily oversold and may test the 21,000 points support level and rebound. The HSI did, not only once but twice before moving upwards to close at 22,532.90 points yesterday. I mentioned that the HSI may face resistance at 24,000 points.

The movement today shows a very uncertain price direction after a huge gap up yesterday, following Dow Jones Industrial Average steep increase last Friday. The uncertain "doji" candlestick pattern indicates resistance in the upward movement. The HSI is therefore expected to pull back to about 22,000 points, and is the HSI is able to stay above this level, it may start to test the 24,000 points resistance level.

However, if the HSI is unable to hold above 22,000 points, then we may expect another down trend rally. Commentary and analysis by Benny Lee


Daily HSI chart as at 21 July 2008, using NextVIEW Advisor