I issued an alarm (refer to my Sunday post on Hangseng Index label) that Hangseng looks exhausted and it will be prudent for traders to cash in on gains, last Tuesday was an opportunity to do that when Hangseng was modestly up 78.2 points.
Asian stocks including Hangseng Index tracked Wall Street's fall and traded lower on Thursday and closed down 160.42 points or 0.6 percent at 25,449.79, losses were however capped by Shanghai's 2.17% gains.
Technically, the market today formed a 'star position' and traders are advised to be on the look-out for potential bullish morning star (this is a candlestick formation of long black candle followed by a small doji and a long white candle); a white candle tomorrow will confirm this formation (preferably the white candle will be supported by strong volume somewhere in the vicinity of HKD 80B of value traded). In this event, Hangseng Index will be ready to take-out 26,390 recent resistance and take-on 27,000.
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