Hang Seng Index: Gap Up and Breaks Above an Important Declining Trend Line

The Hang Seng Index rebounds around 9% from September low, while China's Shanghai Composite Index bounces 3%

Uptrend 2

The Hang Seng Index rebounds around 9% from September low, while China's Shanghai Composite Index bounces 3%. It suggests that the short term momentum of the Hong Kong market is stronger than the China's market.

On the economic front, Caixin China Service PMI rose to 56.8 in October (55.0 expected) from 54.8 in September. Key findings included: "Business activity expands at second-steepest rate since August 2010 (...) Total new order growth accelerates despite further dip in export sales (...) Business confidence improves to highest level since April 2012." Besides, China President Xi Jinping said China would be able to double the GDP by 2035.

On a daily chart, the Hang Seng Index opened a second gap and broke above a declining trend line drawn from 2020 top, suggesting a strong bullish reversal signal. The RSI also broke above a falling trend line drawn from July.

Bullish readers could put the nearest support level at 24500 (the gap occurred on November 3), while the resistance levels would be located at 25850 and 26780.

Source: GAIN Capital, TradingView

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.