Technical Analysis: Hong Kong Index at a significant support level, optimistic in the short termPublished 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.
This material is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to buy or sell the investment product mentioned. It does not have any regard to your specific investment objectives, financial situation or any of your particular needs. Accordingly, no warranty whatsoever is given and not liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of your acting based on this information.
Investments are subject to investment risks. The risk of loss in leveraged trading can be substantial. You may sustain losses in excess of your initial funds and may be called upon to deposit additional margin funds at short notice. If the required funds are not provided within the prescribed time, your positions may be liquidated. The resulting deficits in your account are subject to penalty charges. The value of investments denominated in foreign currencies may diminish or increase due to changes in the rates of exchange. You should also be aware of the commissions and finance costs involved in trading leveraged products. This product may not be suitable for clients whose investment objective is preservation of capital and/or whose risk tolerance is low. Clients are advised to understand the nature and risks involved in margin trading.
You may wish to obtain advice from a qualified financial adviser, pursuant to a separate engagement, before making a commitment to purchase any of the investment products mentioned herein. In the event that you choose not to obtain advice from a qualifies financial adviser, you should assess and consider whether the investment product is suitable for you before proceeding to invest and we do not offer any advice in this regard unless mandated to do so by way of a separate engagement. You are advised to read the trading account Terms & Conditions and Risk Disclosure Statement (available online at www.poems.com.sg) before trading in this product.
Any CFD offered is not approved or endorsed by the issuer or originator of the underlying securities and the issuer or originator is not privy to the CFD contract. This advertisement has not been reviewed by the Monetary Authority of Singapore.