Hang Seng - teetering!

Are the Asian equity markets going to lead their western counterparts down? Its still too early to say but keep an eye on the Hang Seng, as its recent action has moved it to a level where further declines are a distinct possibility - it's teetering on the edge.

A 300 point movement on the HSI is fairly commonplace, so this 100x3 H/L chart is quite 'noisy' and the picture could change very quickly. Remember, each box represents 100 points, x denotes 100 points up, 0 is 100 points down and to create a new column in either direction, you need a (100x3) 300 point reversal.

The first point to note is that the blue bullish support line has now given way to red bearish resistance. The market closed today at 22,601 but made an intra day low of 22,579, allowing me to fill that 22,600 box with an 'O'.

There remains an active target to the upside of 27,200, given by the column of 17 x's to the right of my Isle of Man flag (the column with the 'A' in). But that will fall away if the index can take out 22,100.

More recently, we now have two active targets to the downside, 22,300 and 21,900. There is also a more profound target of 19,500 but this has yet to be activated. It will become active if the HSI falls below 22,400 (which is only 200 points or so away, so we shall see very soon).



The 100x3 chart that uses the closing levels of the index only is actually giving similar targets to the downside. You'll see that I have not 'filled' the 22,600 box as the index did not close below this level today. Bullish support has also given away to bearish resistance.