Hong Kong Hang Seng Index (HSI) – May test next resistance

No market in the region shows very strong bullish sentiment like in Hong Kong. The equity market continues to make new highs and breaking a few technical resistances in a month. The HSI closed at 18,697.53 points at the end of the first week of June, surging more than 20 percent in a month. So far, the HSI has climbed 60% from the low in March this year. Investors are confident about the recent economic developments which are expected to improve its economy.


Weekly HSI chart as at 5 June 2009 using NextVIEW Advisor Professional

The HSI becomes very bullish once it broke the 15,900 points resistance level. There was no major pullback in the current uptrend rally despite being overbought for weeks. Investors and traders are picking up stocks at slight pullbacks are most of them do not want to miss the current wave. The momentum indicators are indicating strong upward momentum which means that there is a high chance that the HSI testing the next resistance level at 19,150 points, a 38.2 percent Fibonacci retracement level from the longer term bearish trend since October 2007. If the HSI remains bullish, expect the HSI to climb to the next resistance level is at 21,300 points. Immediate support level is at 17,680 points while stronger support level is at 15,700 points.

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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.