Hang Seng at 55-week moving average.

The last time I touched on Hang Seng was on 27th January 2024 in my entry Hang Seng plunge causing a stir from critiques. Prior to that I did a yearend review Year End Review of Dow Jones, Nikkei and Hang Seng which also include a read on Hang Seng using the monthly chart.

Hang Seng descended breaking through the neckline of a HUGE double top formation, with end game at 8,794. It is really difficult for me to imagine for Hang Seng to reach this level, it will mean a complete devastation of Hong Kong's economy. Will it come through? I am really not sure. 

While technical analysis in the long run is still a high uncertainty for me, there is more certainty in the nearer future.

While the weekly chart has been on continuous descend since 2023, its gradient is gradual. I believe that it has been on a counter trend. The question on my mind is: when is it reversing?

Fig 1. Hang Seng weekly chart

Reversal seems to happen on the week of 29th January 2024.  However, indication of the reversal is not obvious. Even the momentum of the reversal seems sluggish, stopped and hovered around the 21-week moving average, until this week, when it shot upward only to stop by its 55-week moving average.

This is possibly the C-wave of a minor 3 wave pattern. while presently stopped by its 55-week moving average at 17,709, which also coincides with its 61.8% projection resistance level of 17,564. I suspect it may congest at this level before heading to 89-week moving average of 18,621 and its 100% projection level of 18,466.

There is also another measurement, that takes into consideration of the steep climb with the gradual decline, indicating a 61.8% projection resistance at 19,916 and 100% projection at 23,030. the 61.8% projection coincides with the present position of its 144-week moving average while the 100% mark crosses its previous high of 22,700.

Should the previous high be violated, I will have to consider a potential double bottom reversal with its objective of 30,861.

Whether it is a reversal will have to depends on its upward momentum. Its gradient will have to double that of its descend. If otherwise, the chance of going down further is higher.

Gold shot up....

I normally restrict myself to 1 entry per week. Having more entries tends to drain my brain and less time for other matters on hand, like family time, especially when I am doing this on a weekend. 

However, a video I watched last night about gold plunged in China caught my attention, led me to check on the trend of gold.

Video: China’s Gold Prices Drop Sharply, Gold Stocks Crash, and Gold Shops Flee Overnight | Fake Gold

The video began with a plunge in gold price in China within a week, as a result burning the hands of many. It further narrated the unscrupulous gold retailers cheating consumers of the money through sales of fake gold as well as promise of safe keeping only to close down the outlet conning people of the money.

It stirred my curiosity on price of gold: what was my last stand on gold and how far it is from mt prediction? and has gold plunged as how the video described?

I checked up my past entries and noted my mention of gold was in Did the Israel-Hamas war any effect on the world? dated 14th October 2023. It was certainly quite some time ago.

I mentioned at the time that gold was in congestion and when break upward, I will see resistances at 1,985, 2,105 and 2,184.  

1,985. Should this be broken, it will head for 2,105 to 2,184. I based my highest resistance point at 61.8% projection; the 100% projection level was too far at that point of time.

Fig 1. Gold weekly chart

The chart did not really show a sizeable reversal, instead, it was a minor retreat after breaking through the Bollinger band the week before last.  At the beginning of this this week, it fell further before recovering and closed above the Bollinger band but fall short of the 127% projection of its medium and minor measurement.

With 2 resistances at the same level, it may be a tough nut to crack. However, gold seems to have a momentum upward, observing its MACD steep climb. 

I suspect it will head straight to its major 100% projection level, 2,527, which coincide with its 161.8% projection of medium and minor measurement.

There is still no signal of any potential correction. If it "reverses", I will see its first line of moving average support at 2,254.

It seems that we are going to have another round of inflation here as USD is getting stronger against SGD and gold is inflating against USD.

Good thing that crude oil may be coming down (need one more bar to confirm).

Is Nikkei beginning it's descend?

I touched on Dow Jones again last week noting its gain in momentum for descend, which leads me to look into other indices more related to me. 

So I will concentrate on Nikkei 225 this week.

The last time I checked on Nikkei225 was on the last day of year 2023, when I did a year end review of the 3 main indices and recorded in Year End Review of Dow Jones, Nikkei and Hang Seng dated 31st December 2023.

I used the monthly chart then for my analysis to enable a farther vision of the counter.  I was with an opinion that Nikkei should be rising up with resistance observed between 35,500 to 38,500. 

Since then, I have not touched on Nikkei over its higher time frame, since the time frame I used (3 minutes chart) for my trading is too far from the higher time frames to be affected.

It takes a long time for a 3-minute chart to reach the next resistance / support level on a monthly or even weekly chart. Even when reaching the said levels, it fluctuates in such wide dynamic range.

In short, daily chart is useful enough for movement prediction.

Fig 2. Nikkei weekly chart

Since my last read, Nikkei has broken through the resistance levels that I have highlighted, reaching a high of 41,124 before retreating. This also coincide with the 100% projection resistance of its major move. 

Its descend is with momentum, breaking through the 8-week moving average after a short pause. It also broke through and stayed beliow its 21-week moving average. 

I suspect it will either congest or correct in the coming week, but will descend further there after.\

55-week moving average will be the crucial point for Nikkei, since it also coincide with the 61.8% retracement line at 34,396 and 61.8% projection line 33,655. 

It is also interesting to note that there is a divergence on MACD, even though it is a minor one. There is a need for more divergence signal for more certainty. 

In addition, its upward movement seems to follow a 3-wave behavior, giving me the impression that this is a counter wave.

This counter needs to be monitor closely to determine if Nikkei is indeed reversing. 

Dow Jones started its descend

It was only recently that I didan entry on Dow Jones titled My family Clear bright festival, and is Dow Jones' ascension without end? dated 23rd March 2024.

While I suspect that Dow Jones may reverse downward, I believe that Dow Jone may stll have a little upside space before its reversal.

Dow did an attempt to climb higher the week and failed. 

Dow Jones experienced a continuous 2 weeks of descend since, with momentum!

This created an engulf candlestick pattern, with confirmation.

Has the Dow Descend started?

Fig 1. Dow Jones weekly chart

In its more major move, it seems that Dow Jones has reached its 100% projection objective causing its recent reversal. 

Its descend was only stopped by its 21-week moving average. 

At the same time, divergene is seen on MACD, giving me confidence of its downward intention.

I believe it may pause shortly in the coming week or 2 before continuation, f I consider a gentler downward movement. 

If it maintains its momentum and break through the 21-week moving average, we may see the 3 black crows confirming its intended direction. 

The first support level I see is between 36,597 to 37070. Breaking this level will lead to the next support level between 25,297 to 26,223. Coincidentally where its 55-week moving average is at presently.

I believe Dow will have to reach this level for this descend, I believe in the strength of the 55-week moving average than that of the 21week.

Divergence after divergence after divergence... on MYR....

 Less than a month after my last trip back, I am again heading home to KL, I am travelling alone this time.

Why? It is my brother's birthday. The is only my mother and the maid at home, not much to celebrate, which is why I am heading home. 

It is also in the coming week that the Malay community celebrate their Hari Raya Puasa after a month of fasting during Ramadan. It is a big event for the Malay as well as the Muslim worldwide.

Since I am heading for Malaysia, I might as well conduct a read on MYR. My last update on MYR was Did SGD get weaker? dated 19th November 2023. The entry was due to my suspicion that SGD might get weaker than MYR in the near future.

The entry focused on SGD and MYR was not really analyzed. Since then, MYR turned weaker against SGD.  

Fig 1. MYR weekly chart

From the chart, MYR further weakened against USD. However, it barely broke its previous high before retreating, an indication of weakness. 

As can be seen from the chart, there are multiple divergences on MACD every time MYR reached a new high. 

In the short run, there is a sign for continuation downtrend, I suspect there will be support between 4.62 to 4.67. This also coincide with the 55-week moving average support level. 

Is MYR itself is strengthening? 

Let's check a second pair, SGDMYR.

Fig 2. SGDMYR weekly chart

Similar behavior is seen on SGDMYR, with numerous divergences, although lesser than USDMYR. This is mainly due to USD less stable than SGD.

I can only use retracement, which yield a support at 3.43, coinciding with its 55-week moving average.

At present, the moving average alignment is still healthy, giving me an impression that MYR itself is on continuation with the recent strengthening a correction.