Technical Analysis: Bullish momentum on Hong Kong Index, awaiting possible breakout
- Taking a look at the Hong Kong Index, we can see that price was in a strong uptrend for the past week, forming a bullish candle just shy of the trendline’s resistance level drawn from the high on 07/07.
- Drawing a Fibonacci retracement level from the high of 07/07 to the low on 25/09, we can see that price did go higher than the 50% Fibonacci level, but closed below it, showing additional signs of resistance.
- Drawing an additional trendline from the low of 09/25, we can see that a possible breakout might occur in the coming week. Keeping in mind the possibility of a breakout in either direction, if price was to close above the top trendline, we can expect bullish momentum up to the 23.6% Fibonacci resistance level (red arrow). If price however, was to close below the bottom trendline, we can then expect bearish momentum down to the 78.6% Fibonacci support level (green arrow).
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