Technical Update - Strong bounce in Hang Seng and China A50. Will they keep going higher?

Technical Update - Strong bounce in Hang Seng and China A50. Will they keep going higher?

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

 

Hang Seng Index jumped higher Friday after testing the (black) falling trendline from the upper side. Hang Seng could move to test strong resistance area at 17,682-18,164. However, weakness could set in earlier. RSI is still below 60 i.e., negative sentiment. It needs to close above 60 to switch to positive sentiment.
If Hang Seng slides back and closes the gap i.e., closes below 16,640 selling pressure is likely to accelerate. New down trend will be confirmed if Hang Seng closes below 15,945.

Source all charts and data: Saxo Group

FTSE China A50 future has bounced strong establishing a short-term uptrend closing above key resistance at around 12,294. However, RSI still showing negative sentiment needs to close above 60 to reverse that. 0.382 retracement of the October selloff and 0.618 retracement of the July to October down trend are both around 12,600 which could prove to be a strong resistance area. The 55 daily SMA and the upper falling black trendline will also provide resistance.
If A50 drifts lower and closes below 11,729 the down trend will resume.

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