Hang Seng’s very technical, bullish reversal
09 December 2022
A lot is happening around indices from China who are currently in a very positive mood after easing of Covid restrictions and returning back to “normal”. In this piece, we will focus on Hang Seng - an index from Hong Kong who has been the strongest one in the world for the past few days and is currently flashing with a new buy signal.
The reversal on Hang Seng started in November when the price managed to create a very handsome inverse head and shoulders pattern (green). On the last trading day of November, buyers managed to break the neckline of this formation (lower orange), which triggered the buy signal and officially started a mid-term bullish wave. The next important step is taking place today as the price is breaking the long-term down trendline that was connecting lower highs since June 2021. This occurrence clears all important resistance for now and sets the target on the yellow area - highs from April and June 2022.
As long as the price stays above the orange support, sentiment is positive. Price dropping below it would be a major sell signal but chances for that are limited for now.