Hong Kong HSI: Now in short term down trend

The breakout from the consolidation period two months ago was short-lived as the HSI went back in to the trading range which was between 22,000 to 25,000 points. The HSI failed to test the 27,500 resistance level since last month. It went as high as 26,377.99 points before closing at 24,383.99 points. The decline from the high ends the short term up trend as lower lows and lower highs are formed.

The RSI indicator is now below 50 and this shows that the bears are taking over. The HSI is now in a short term down trend. The HSI is currently at its short to long term averages (identified by 30 to 90 day moving averages). The ADX indicator suggests a strong momentum developing downwards. Therefore, we may expect the HSI to test the immediate support level at 23,000 points. Resistance level is lowered to 26,500 points from 27,500 points. By Benny Lee