The Hang Seng Index will take a roller-coaster ride up to 12,000 points in February before collapsing to about 5,500 points by the end of next year, according to SG Securities regional technical analyst Tom Schroeder.
'I'm looking at 10,900 [points] by the end of [this month],' he said. 'From there, I see a tumble in December to 9,200.
'Then running into the 'January effect' and a flush of liquidity around the Lunar New Year, [the index would reach] 11,800 to 12,000 in mid to late February.' The index finished yesterday at 9,851.93 points, 47.91 per cent higher than its year-low of 6,660.42 points, reached on August 13.
In technical analysis market movements are predicted according to historical price and trading patterns.
Mr Schroeder said Hong Kong was in the midst of a bear rally, partly because of rising liquidity as interest rates fell around the globe.
Investors might have plenty of time to ride this rally. 'Bear rallies can last three to six months,' he said.