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Hang Seng Index (HSI) Facing Downtrend Pressure

 


Hang Seng Index (HSI) Facing Downtrend Pressure

What are we expecting?
Hang Seng Index (HSI) fell below its key support level at 28,000. This break is more significant than usual as HSI has just experience index being halted at 31,000 level, and mounting Supply as indicated by our proprietary FFI (Fund Flow Index) indicator. 

These actions suggest the index is in a Distribution Phase, entering Mark Down phase.

First level of support for HSI will be at 26,000 area cushioned by high volume area and 1.618% Fibonacci level.

Who should be concerned?
Investors: Investing in the Hong Kong Market may reduce position at this point but also keep a lookout for stocks that show signs of bottoming during the Mark Down process.

Traders: Taking short positions is preferred till 26,000 target reach or character of accumulation phase is observed. 

Why the Mark Down?
Stock market is always forward priced, we will not be able to clearly define the reason till 3-6months later. One marco trend that is developing is expectation of inflation, which leads to hike in interest rate environment, threatening companies recovering from the COVID-19 pandemic.


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