Posted by Book Eater
Hang Seng Market Overview:
A floor or a retest at 20,350?
After the sell-off in the US markets last Friday, HK followed gapping down approximately 300 points in the open at 20,999.32, and solidly went down but only for a further 50 to 150 points more. Market made an intraday low of 20,844.15 and closed 355.58 points down at 20,906.31. While today’s action was largely sideways, traders should still be long in this market considering the divergent path between the MACD and the price amid these oversold levels. However, a retest of 20,350, market’s previous low cannot be ignored.
Recommendation: Traders can go long on selective stocks. Many chart patterns are divergent. One of which that I will highlight today is Orient Overseas or 316 HK.
Intraday Hangseng Chart
Daily Hang Seng Chart:
Stock Picks:
Orient Overseas (316)
Support: 25.45
Preferred Entry: 26.00 or below
Resistance: 29.80
Risk Reward Ratio : 3.80 gain versus 0.55 loss ~ 6.91
