Hang Seng Update

An interesting turn around in the fortunes of the Hang Seng, with the bulls (for now least) running with the ball. Up until very recently, this chart was showing clear evidence of distribution as bears took control, pushing the index to lower lows with each down column of 0's. But in May/June, the 19,000 box provided support and tempted buyers back in to the market. We saw a 3 box (750 point) reversal and a new column of X's take the index back up to 20,750. At this point, the bears moved in and a 750 point move created a new column of three 0's but this has since reversed in to a column of X's and a 1,750 point move higher in the index.

We have an an activated upside target of 24,250. To the downside, the target of 14,750 remains active but will fall away if the index can push onwards above 22,250. If the market does continue upwards, expect some resistance at 22,750, the level where the market last reached in the bullish move upwards prior to reversing.

Contrast the P&F above with the normal bar chart below. Some gaps to be filled below and a possible re-test of the 50 day moving average? Recent action though has been higher highs and higher lows.