Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
Technical Analyst, Saxo Bank
Hang Seng Index has for two days in a row broken above the resistance at around 18,562 but failed to close above. That is a sign of weakness and Hang Seng is likely to pick up bearish trend.
Even if the Index will manage to close above the resistance the upside potential seems limited. 55 daily Moving Average is coming down around 19K and the 100 Moving Average is declining currently around 19,300, and the upper falling trendline will also add to the resistance.
A close above 19,350 is needed for Hang Seng to turn bullish.
If the down trend is resuming Hang Seng is likely to slide lower to around 17K.
HK50 cfd formed 30th August and inverted hammer candle which is regarded as a top and reversal candle. The resistance at 18,672 seemed too strong for HK50 to close above thus building uptrend.
A close above 18,744 could fuel a short rally towards 19,000-19,100
Currently test minor support at around 18,226 HK50 seems set to resume downtrend. A move to 17,328 support is in the cards