HSI stuck within tight trading range
Hong Kong Hang Seng Index (HSI) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
HSI finished Wednesday at 24725.63 edging lower $7.13 (-0.03%). 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 Sep 16, 2020):
Wednesday's trading range has been $194.63 (0.78%), that's far below the last trading month's daily average range of $327.23. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HSI. Prices continued to consolidate within a tight trading range between 24556.52 and 24829.87 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on August 19th, HSI lost -1.54% on the following trading day.
Prices are trading close to the key technical support level at 24615.60 (S1). After having been unable to move lower than 24621.65 in the prior session, the market found buyers again around the same price level today at 24635.24.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
As prices are trading close to September's high at 25254.14, upside momentum could speed up should Hang Seng mark new highs for the month. Further selling might move prices lower should the market test August's close-by low at 24167.79.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Hang Seng. Out of 479 times, HSI closed higher 53.03% 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 53.03% with an average market move of 0.19%.
With three of the other Major World Indices closing higher and three closing lower today, the winners of the day are DAX surging 0.29% and DJIA gaining 0.13%. On the flipside the worst performers have been NDX closing -1.67% lower and SPX losing -0.46%. Read more