Technical Analyst, Saxo Bank Group
Last week, I posted an analysis of Chinese stocks testing important support levels. This morning, those levels are broken.
Both the Hang Seng 50 and FTSE China A50 indices closed below long-term support. In the FTSE China 50 index, we saw a close below 12,000 with Bollinger bands expanding and RSI below 40 – all indicators of lower levels to come. The next major area of support for the FTSE China 50 index lies around 11.400.
We see a similar picture in the HK 50, which closed below support around 29.125 and tested 29.000 this morning (note: the 29,000 level is not simply a 'round number' area of support but has more long-term significance).
Investors should keep an eye on these charts as the trade war theme intensifies.
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