Technical Analysis: Hong Kong Index at a significant support level, optimistic in the short term

Published On: 7 September 2020
Lester Chua, Dealer

  • Taking a look at the Hong Kong Index, we can see that price closed the week at a low, forming a dragonfly doji candlestick which could signify a potential reversal.

  • Price broke through the 61.8% Fibonacci retracement level (green arrow) but did not manage to close below it, which shows further signs of a strong support level. Price will be expected to respect this support level, and we will be looking at the 78.6% Fibonacci level as the next target price (red arrow) before further consolidation ahead.

  • Drawing 2 trendlines, we could also be looking at a potential breakout of the triangle formation in the weeks to come, likely on the back of strong fundamental news. If price were to close below the 61.8% Fib level as well as the bottom trendline, we can expect a strong downwards swing all the way to the 23.6% Fib level.

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