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.