Four Black Candles out of the last Six Trading Days is an early signal that buying momentum is decreasing as the index slow down as it approaches key 27,000 strong resistance; likewise, average value turn-over dropped 16% week-on-week. Moreover, Hangseng ignored Shanghai’s 4.8% gains last Wednesday when it dropped 0.60%, these are technical signs of market exhaustion; therefore, it will be prudent for traders to lighten up long positions as the index approaches 27,000 level and pocket gains made for the week.
On the other hand, in the event 27,000 resistance is taken out by the index (which is unlikely), wait for the market to successfully re-test this level before entering new long positions; otherwise, wait for the index to pull back and re-test its’ 200days moving averages. There may be some swing trades opportunities at this level because of the high probability that 200MA will hold.
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