Hang Seng Index faces a setback after losing bullish momentum, mostly driven by the negative sentiment amid hawkish remarks made by Federal Reserve’s Chair, Jerome Powel. As a result, the Hong Kong benchmark index has plunged to fresh weekly lows and has erased all of the gains that it secured earlier in the week.
HSI concluded the week by slipping 300 points below Thursday’s close. In addition, the Chinese chip manufacturer SMIC also disappointed investors with a more than 80% drop in its third-quarter profit. The weak Q3 earnings of SMIC have spread concerns regarding the earnings of other tech giants like Alibaba, Tencent, and Meitun.
A glance at the chart below shows the unsuccessful attempt by the bulls to confirm the recent breakout above the downward trendline. Despite opening 2% above last week’s close, the bulls succumbed to the bearish pressure and the index plunged back below the downward trendline.
The dip below the downward trendline has triggered the scenario of another retest of the 16,831 points support level which marks the yearly lows.
The only way for the Hang Seng index forecast to turn bullish is if the index smashes through the downward trendline in the coming days. Such a move will set the stage for a retest of 18,275 points resistance which is its October high.
This post was last modified on Nov 10, 2023, 16:08 GMT 16:08