HSI unable to break through key resistance level
Hong Kong Hang Seng Index (HSI) Technical Analysis Report for Apr 15, 2019 | by Techniquant Editorial Team
HSI ended Monday at 29810.72 losing $99.04 (-0.33%). Trading $160.27 higher after the open, the stock index was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on April 4th, HSI actually gained 0.47% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (HSI as at Apr 15, 2019):
Monday's trading range has been $469.40 (1.56%), that's far above the last trading month's daily average range of $282.79. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HSI.
Two candlestick patterns are matching today's price action, the Bearish Closing Marubozu and the Black Candle which are both known as bearish patterns.
Unable to break through the key technical resistance level at 30222.02 (R1), the market closed below it after spiking up to 30280.12 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 29694.85 where further sell stops might get triggered. As prices are trading close to April's low at 29383.72, downside momentum could accelerate should Hang Seng mark new lows for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Closing Marubozu" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Hang Seng. Out of 14 times, HSI closed higher 71.43% 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 71.43% with an average market move of 1.03%.
With three of the other Major World Indices closing higher and three closing lower today, the winners of the day are NKY surging 1.37% and DAX gaining 0.17%. On the flipside the worst performers have been DJIA closing -0.1% lower and SPX losing -0.06%. Read more