Hang Seng Index Technical Analysis – New easing measures announced

Fundamental
Overview

The PBoC tonight announced new easing measures which included further rate
cuts and stock
buyback funding. Moreover, we got some positive
economic data with Retail Sales and Industrial Production beating
expectations by a big margin. These catalysts might see dip-buyers piling into
the market again after last week’s big correction.

Hang Seng
Index Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the price bounced around the 20K level where we had also the 50% Fibonacci retracement level. The area between the 20000
and 19600 level is a strong support
zone for the buyers. The target should be a new cycle high. The sellers will
want to see the price breaking below the support zone to increase the bearish
bets and extend the drop into the 18200 level next.

Hang Seng Index Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the bounce today following the new Chinese easing measures.
The first target for the buyers should be the swing level at 21635, which is
what they will need to break to increase the bullish bets into new highs. The
sellers, on the other hand, will likely lean on the swing level to position for
a drop back into the 20K support zone.

Hang Seng Index Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price broke through the downward minor trendline
today. This could be a signal of a change in momentum. Moreover, the price
rallied to the top of today’s average daily range already, so we might not see
new highs today.

Nonetheless, the buyers
will want to see the price rising back above the 20781 level to keep targeting
new highs, while the sellers will likely pile in around these levels to
position for a drop back into the 20K support zone.