The benchmark of Hong Kong equities, the Hang Seng index, refreshed its 52-week lows on Thursday. However, the buyers stepped in at the lows and the index closed the day with a gain of almost 50 points.
On the monthly timeframe, the HSI index showed a 0.41% drop in November which makes it the fourth consecutive red month for the Asian index. I won’t be surprised if the index opened lower on Friday as the US stocks fell despite cooler PCE inflation data.
In any case, 16,830 points level must be held or the Hang Seng index forecast will turn even more bearish. This may put a retest of the December 2022 lows around 14,600 on the cards. However, it is too soon to panic as the support level is being held for now.
The reason why there is still a significant probability of the 16,830 support to be held is the bullish divergence on the RSI indicator. This is evident from the following chart because while the Hang Seng index has made a lower low on the daily timeframe, the RSI has made a higher low.
This post was last modified on Nov 30, 2023, 17:10 GMT 17:10