Technical Update - Hang Seng and Nikkei
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Several times have Hang Seng tried to penetrate 0.618 retracement and resistance level at around 22,450 only to be rejected every time. Yesterday it happened again but there is still no reversal signal from the rebound.
However, RSI hasn’t closed above 60 threshold and there was no divergence at the troughs in March which indicates bear trend could resume.
If Hang Seng closes below short term rising trend line support at around 22,786 and the Gap from March is likely to be tested.
A close above strong resistance at 22,665 will demolish this scenario sending Hang Seng towards 0.764 retracement at around 23,442.
The HK50 cfd (Future) just touched the strong resistance at 22,653. It could be the exhaustive move of the rebound since mid-March. A break below 21,200 will confirm bearish trend to resume. Next key support is at the 0.618 Retracement at around 26K
Japan 225 cfd (Nikkei future) peeped above the 200 daily SMA a couple of times only to be sent back below. Now back below 100 SMA Bears seem to have taken control pushing the Index close to the 0.382 retracement at around 26,911.
MACD has turned bearish but RSI still bullish. However, with Tuesday and Wednesday’s bear move bearish trend seems to have resumed.
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.