HSI closes below its opening price unable to hold early session gains

Hong Kong Hang Seng Index (HSI) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team


HSI breaks back below 50-day moving average
HSI falls to lowest close since June 30th
HSI closes below its opening price unable to hold early session gains
HSI finds buyers at key support level
HSI closes lower for the 2nd day in a row


Moving lower for the 2nd day in a row, HSI finished the month 0.69% higher at 24595.35 after losing $115.24 (-0.47%) today. Today's close at 24595.35 marks the lowest recorded closing price since June 30th. Trading $191.56 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Thursday's low at 24616.05, Hang Seng confirmed its breakout through the prior session low after trading up to $81.26 below it intraday.

Daily Candlestick Chart (HSI as at Jul 31, 2020):

Daily technical analysis candlestick chart for Hong Kong Hang Seng Index (HSI) as at Jul 31, 2020

Friday's trading range has been $404.06 (1.63%), that's slightly below the last trading month's daily average range of $485.30. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HSI.

After trading down to 24534.79 earlier during the day, the index bounced off the key technical support level at 24552.55 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on July 20th, HSI gained 2.31% on the following trading day. The stock index closed back below the 50-day moving average at 24678.88.

HSI shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.

Selling might speed up should prices move below the nearby swing low at 24526.91 where further sell stops could get activated.

Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Hang Seng. Out of 339 times, HSI closed higher 59.59% 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 54.57% with an average market move of 0.35%.

With three of the other Major World Indices closing higher and three closing lower today, the winners of the day are NDX surging 1.78% and SPX gaining 0.77%. On the flipside the worst performers have been NKY closing -2.82% lower and FTSE losing -1.54%. Read more

Market Conditions for HSI as at Jul 31, 2020

Loading Market Conditions for HSI (Hong Kong Hang Seng Index)...
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