Hong Kong Hang Seng Index (HSI) – Bullish momentum coming to an ease

The strong bullish momentum in the Hong Kong equity market came to an ease last month when HSI only managed to increase 9.5% month-on-month, as compared to 14% month-on-month performance in May. Trading volume was relatively high but declining. Investors continue to wait for any positive news to enter into the market. The HSI climbed early June to test the resistance level of 19,150 points, which I highlighted in my article last month based on a Fibonacci retracement study. The HSI went as high as 19,161.97 points but unable to stay above it and slowly made its way to close at 18,600.26 points end June.


Weekly HSI chart with volume as at 26 June 2009 using NextVIEW Advisor Professional

Like most other markets, technical indicators on the HSI are showing bearish divergences which means that the current up trend is getting weak. Therefore, the HSI may face more pressure to push it higher to the next resistance level. The chances are low that the HSI may break above the current resistance level at 19,150 points but if it does break and stay above this level, it may start to test the next resistance level at 21,400 points. Chances are higher that HSI go into a downward correction with a support level at 16,000 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.