The recent rally in the Hang Seng Index to seven-month closing highs puts the city's stock market benchmark on the verge of a break above a trading range that has been in place since October 2011. Evidence of strengthening demand can be seen in the latest proprietary buying power index from Lowry Research, which has climbed to a new high as the rally gathered steam. "Gains in momentum indicators also suggest improved conditions behind the recent rally as the percentage of stocks trading above their 30 and 150-day moving averages shows substantial gains," Lowry analysts write in a new research note to clients. Caution is warranted though, as the sideways trading pattern in the firm's selling pressure index leaves open the risk of a sudden increase in downside pressure on the Hang Seng Index.
