Originally published by guppytraders.com
It is not a substitute for the implementation of the. The behavior of the Hang Seng is very different and must be traded accordingly. There are sometimes superficial similarities, but assuming that they are something other than superficial is a trade error.
The Shanghai index has seen a long downward trend since February 2018. The Hang Seng has been in a steady upward trend since the beginning of 2016. The recent Hang Seng support rebound at 25300 is not a duplicate of the Shanghai index rise in recent weeks.
The Hang Seng trades in clearly defined trade groups. The trend behavior takes place within this context. The support area is near 25300 with the top of the trade band near 28500. This resistance level has been broken and a continuation of the outbreak sets the next upward target at 32000.
However, there are additional resistance properties that must be overcome. On the weekly chart, the uptrend, which starts in early 2016, is defined with a single uptrend line. This acted as a support level until about September 2018 when the index fell below the trend line. Now the trend line works as a resistance level.
Trendline resistance is currently nearly 30,000. A breakthrough above the trend line is very bullish and has the following target near 32000., the trend line is a powerful resistance force, so there is a high chance that a further rise in the Hang Seng will cluster below the value of the trend line . This delays the momentum of the Hang Seng rise.
Daryl Guppy is a leading expert in the field of international financial technical analysis and a special consultant for Axicorp. Guppy regularly appears on CNBC Asia and is known as "The Chart Man". Disclaimer: Daryl Guppy is not a financial advisor. These comments are for educational purposes only and provide an example of applied technical analysis.
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