HSI runs into sellers again around 26491.27
Hong Kong Hang Seng Index (HSI) Technical Analysis Report for Nov 08, 2018 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, HSI ended Thursday at 26227.72 gaining $80.03 (0.31%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (HSI as at Nov 08, 2018):
Thursday's trading range has been $350.02 (1.32%), that's below the last trading month's daily average range of $442.45. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for HSI. Prices continued to consolidate within a tight trading range between 25747.52 and 26530.87 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on October 26th, HSI actually gained 0.38% on the following trading day.
Prices are trading close to the key technical resistance level at 26530.87 (R1). After having been unable to move above 26530.87 in the previous session, Hang Seng ran into sellers again around the same price level today, missing to move higher than 26491.27.
Although the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the nearby swing high at 26530.87 where further buy stops could get activated. Selling might accelerate should prices move below the close-by swing low at 25747.52 where further sell stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for Hang Seng. Out of 159 times, HSI closed higher 54.72% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.35% with an average market move of 0.29%.
With three of the other Major World Indices closing higher and three closing lower following today's FOMC announcement, the winners of the day are NKY surging 1.82% and FTSE gaining 0.33%. On the flipside the worst performers have been NDX closing -0.62% lower and DAX losing -0.45%. Read more