Technical Update - Hang Seng Index and China A50 closing in on strong resistance levels. Will they break them?

Technical Update - Hang Seng Index and China A50 closing in on strong resistance levels. Will they break them?

Equity 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank Group

Hang Seng Index is bouncing off the medium-term falling trend line continuing higher getting close to key resistance at 20,185.
RSI is showing positive sentiment supporting the bullish move. A close below 18,814 will reverse the short-term bullish uptrend
If Hang Seng manages to close above 20,185 the medium-term bearish trend has reverse with short-term potential to resistance at around 22,400-22,450 – see weekly chart.
To reverse the medium-term bullish outlook a close below 16,833 is needed.

Source all charts and data: Saxo Group


FTSE China A50 future is touching its 200 daily SMA. If A50 can move above, it will be met with strong resistance at around 13,500, close to the 0.618 retracement.
A close above 13,502 could give more upside potential for A50 possibly to the 0.786 retracement at around 14,190.
If A50 instead slides lower to close below 12,610 the short-term uptrend is demolished.

A50 is also moving closer to the upper falling trendline. A close above both 13,502 and the trendline will reverse the medium-term bearish trend with potential to 15K. But if A50 is being rejected and RSI is being rejected at 60 threshold the downtrend is set to resume.

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