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Bearish Hang Seng Index loses 52-week high, meets multiple confluence

Losing the 52-week high, Hang Seng Index fails at resistance, psychological level

Straightforward, the 52-week high is the highest traded price of an equity in 1 year. It is a psychological level that the market looks at. When an equity rises above the 52-week high, it is in a strong rallying mode and is expected to make new highs. In addition, the level is a support resistance too. It behaves as a resistance level when price is nearby. When price of an equity breaks out above, the 52-week high becomes ‘former-resistance, potential-support’.

Like Zeus, the ruler of the sky who has a brother Hades who rules the underworld, 52-week high has a sibling 52-week low that dictates sentiment for equities making 1-year low.

Hang Seng Index Future

Hang Seng Index Future fails at 52-week high

 

Hang Seng Index made a 52-week high in February early this year. It broke out briefly last 2 weeks (Weeks 48 and 49) before failing early on Monday. This failed break is now a perfect trigger for fading the long.

 

Confluence signs on daily line chart reinforces bearish view

On the daily line chart, a ‘head and shoulders‘ bearish reversal chart pattern adds more negativity to the technical picture. This head and shoulders pattern already has a broken neckline. If market closes today with this picture intact, the head and shoulders chart pattern is complete. Finally bearish expansion on price this week adds punch.

Head and shoulders

Head and Shoulders bearish reversal chart pattern coincides with bearish expansion

 

The 52-week high in the Hang Seng Index is also 61.8 fibonacci retracement level on monthly chart. Read our story ‘Fibonacci Retracement Levels scores hat-trick with Hang Seng Index‘.

 

Hang Seng Index Futures now available on MT4 with Axitrader

To pull out the chart

  1. On the overhead toolbar, click ‘Market Watch’ to show panel on left.
  2. Anywhere in market watch panel, right click to show pop-up menu.
  3. Click ‘Show all’.
  4. Look for HSI.
Hang Seng Index Futures in MT4

How to show HSI Futures in Axitrader MT4

What is Hang Seng Index?

The Hang Seng Index is the stock market index of Hong Kong and is used as the main indicator of market performance. There are 50 constituents in the index which can be found here.

Product information and trading hours available here.

 

 

4Shares

Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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