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Hang Seng TECH Index Eyes 6,100 After Breakout: Momentum Building on Technical and Macro Tailwinds

 



The Hang Seng TECH Index has made a strong move above the key 5,400–5,500 resistance zone, validating a technical breakout from a multi-month consolidation range. This marks a significant step forward in what now clearly resembles the "Mark-Up Phase" in the Wyckoff Market Cycle, following a long and well-defined Accumulation Phase.

Technical Observation

As illustrated in the chart, the breakout comes after repeated tests of overhead resistance and a constructive sideways consolidation. The move not only pushes the index above the psychological 5,500 level but also aligns with a broader bullish trend channel that has formed since mid-2024.

The Fibonacci projection tool points to 6,100 as the next resistance area (1.618 extension), a level that the index previously tested but failed to hold. Should bullish momentum persist, the subsequent 2.618 Fibonacci extension level around 6,500–6,600 could come into play.

Importantly, price action remains well-supported within the ascending channel, reinforcing the view that the current leg is not a short-lived rally, but a broader shift in sentiment toward Chinese tech equities.


Macro Tailwinds Supporting the Breakout

This breakout isn’t happening in isolation. Several macro developments are supporting the rebound in Chinese tech stocks:

1. Beijing’s Stimulus Push

China has ramped up policy support in recent months, including:

  • A targeted 1 trillion yuan bond issuance to boost infrastructure.

  • Easing in local government financing restrictions.

  • Encouraging private capital to flow back into tech innovation sectors via favorable tax and loan policies.

2. Improving China-U.S. Tech Relations

Nvidia and AMD recently received approvals to resume select AI chip shipments to Chinese customers through a “white-list” arrangement, easing concerns about a full-scale decoupling. This has lifted sentiment across the semiconductor and broader tech sector in Hong Kong.

3. Rebound in Economic Data

Latest economic indicators suggest a bottoming out:

  • June industrial production rose 6.3% YoY, beating expectations.

  • Retail sales gained 4.1%, showing signs of consumer confidence returning.

  • Exports rebounded, with tech hardware shipments contributing to the upside surprise.

4. Improving Earnings Outlook

Key constituents like Alibaba, Meituan, and JD.com have issued upbeat guidance for the second half of 2025, citing cost efficiency and expanding overseas operations as major drivers.


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