Chart of the day: Hang Seng Index faces uncertain outlook
The Hang Seng Index’s lowest weekly close in seven weeks completes a tiny little rounded top on this chart for the Hong Kong benchmark gauge. While there is nothing dramatic, the hint of further problems lies in the C wave of an A, B, C-type move where C is roughly 61 per cent of the height of A. We are currently testing the nine-week moving average. Unless we bounce from here within the next two weeks, a drift down to the 26-week moving average and maybe even trend-line support is possible. As all aspects of this Ichimoku cloud chart were still bullish by the end of Friday last week, we are not suggesting impending doom, but rather a case of keeping a keen eye on this index.
Nicole Elliott is a technical analyst