Hong Kong Index Break out of Downward Channel

Published On: 19 June 2023, 9.05 AM | Jeraldine Tan, Senior Dealer

Trade Setup

  • Hong Kong Index had been in a downward channel after being rejected at recent high, and is now in the midst of forming the right shoulder of an Inverse Head and Shoulders pattern on a higher timeframe
  • Price has just broken out to the upside of the downward channel, which is in line with the recent opening of Hong Kong 

Trade Execution:

  • Bulls can take an entry on this break up with a stop loss below the Big Round Number of 18,000, which was a recent low
  • A possible Profit Target can be slightly below recent high of 22,715 – a level which had been tested multiple times (neckline of Inverse Head and Shoulders pattern)
  • Trader should also note the price action around 21,000 level (a recent resistance level)
  • If momentum slows down, trader can possibly take some profits on partial position, and move the stop loss to the break-even point