Hong Kong Hang Seng Index: Correction Expected to Continue

The Hong Kong market typhoon has started to ease. The HSI found resistance at 15,000 points after rebounding sharply. It started to weaken downwards but failed to test the 11,000 points support level. Instead it found temporary support at 12,000 points level before closing at 13,509.78 points. The previous support and resistance levels of 11,000 points and 16,000 points have been revised to 12,000 and 15,000 points respectively.


Daily HSI chart as at 4 December 2008 using NextVIEW Advisor. Click on chart to view enlarged chart.

The HSI is still in a major down trend as the short to long term moving averages are still declining. The HSI has started to rally towards its short term down trend resistance level. However, it is still way below the mid-term 60 day average which is at 15,700 points. Although the HSI is trading sideways, the momentum RSI indicator indicates a buildup in momentum upwards. Therefore the HSI correction is expected to continue.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

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