Dark cloud covers Hang Seng

The US election was over and the market reacted. Well, at least the US market did so with euphoria. Dow Jones surged to 44,163, close to the level that I estimated of 44,932 last week in US election is right around the corner.... It will be interesting to see how the US market develop after the euphoria is over.

For the time being let's check on Hang Seng index because it is definitely not doing too well. In my last update Hang Seng is climbing..., I hacve indicated that Hang Seng is climbing with resistances of up to 22,868. Hang Seng reached 23,257 before it retreated. Since then, while declining, the weekly move was much more mellow.

So, is Hang Seng going back up soon or there is more down slide coming?

Fig 1. Hang Seng weekly chart

Indeed, based on the multiple setups resulted from Hang Seng, it certainly seems bullish. The issue here is that there are multiple projection resistances between a narrow range of 22,737 to 22,918. This I believe is the primary cause of its reversal on week of 6th October 2024. It opened higher, climbed up a little but came all the way back down recovering more than 50% of the previous week's gain. 

This in fact forming dark cloud covers for Hang Seng, indicating a negative reversal. 

Hang Seng is coming down.

Where are the support?

My Favorite is the 55-week moving average of 18,439. In addition, there is a a support zone between17,978 to 19,263.

The problem is that the moving averages alignment maintain a downward signal. I have got a feeling that Hang Seng's decline may not end here.

Meanwhile, Hang Seng managed to hit higher high, while there is yet divergence from MACD. 

We may still be seeing a correction or a complex B wave for Hang Seng.

Should Hang Seng be supported by its 8-week moving average at this point of time, we may see it climbing higher to between 27,585 to 30581, which is the double bottom objective of Hang Seng.

For the time being, my estimation will be a continuation to 55-week moving average before revering upward. The 8-week moving average will be an important determinant for Hang Seng's decision.