As noted in early November, if the Hang Seng Index were to manage a weekly close above 28,800 points, one should prepare for more gains. We certainly got that through to the end of January, culminating in a parabolic surge for seven consecutive weeks to take the index above its well-established trend channel. But this all ended suddenly, gapping back down to the bottom of the channel, which has held miraculously for the following six weeks. The move mirrors that of other global indices, where we are watching weekly, monthly and quarterly candles to see whether a more serious market downturn is on the cards. A weekly close below the channel will hint at a drop to the rising Ichimoku cloud. Nicole Elliott is a technical analyst
