Sunday, February 28, 2010

Hang Seng Index


Hong Kong stock market improved over the week. The Hang Seng index dropped below its 200 day moving average in early February but managed to close slightly above it for the last trading session of February.

The technical charts are showing a mixed picture.

The MACD signal is above its indicator line which is a bullish sign. However, the RSI is approaching overbought levels. In a bullish environment, market may stay in overbought territory for some time before falling back. But this time, the ADX is not indicating a bullish trend and –DI is still above +DI. Hence, at best we are seeing a slow down in the down swing.

The market is most likely going to move sideways with the 100 day moving average serving as resistance and 200 day moving average acting as support level.

A break below the 200 day moving average will be a negative sign and if that level is taken out, the next support will be at 19400 level which is near the low set in 8 Feb 10.

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