Hang Seng...London`s fog!Hello Traders,
to count a chart is sometimes a challenge! You think you are on the right path most of the time and the picture seams cristal clear.
Then, suddenly, some unexpected happens, and your view is like watching through London´s fog!
This is how I feel now!
The past two days, I try to figure out, what is going on with Hang Seng, and the bullish picture I had, has got some cracks. So while I am not sure about the big-picture, I want to approach the possible count in steps!
So, let`s begin.
Based on the monthly chart we are able to recognize that a „big-change“ of trend could be underway.
The drop from the ATH @ 33484 shows a clear „wave-overlapping“ between a possible wave „I“ high and a possible wave „IV“, `cause it dropped into the price territory of wave „I“ what is a clear „knock-out“ of the Elliottwave rules. So the odds become greater, that a possible wave (I) or (A) of Supercycle-degree has ended at this point. The decline since `til now is a „three-down“which implies a corrective structure.
From a Fibonacci view, a 0.382 level (@ 24771) was broken by the last leg of decline in the past week. Note that the weekly close was below this area, which is to me important to view!
Measuring the „three-down, wave equality is achieved at 21336.7. So plenty of room to go downside!
Based on the monthly chart, we need to get a close above this month candle high, what is @ 26805 and the candle must be „green“, i. e. bullish, to apply a short term change of trend!
View the weekly chart we are able to observe a „divergence“ by the STOCH and price. Note, that STOCH did not change it`s declining trend to the upside, so, here too, there is much room to decline, (the green box shows the possible stopping range based on a monthly chart)!
Again, measuring the last leg of decline from the possible wave ((B)) to Friday`s low, HS closed above the 1.618 Fib-Extension of a possible wave „Y“ of a „W“-X“-“Y“ or „A“-“B“-“C“ correction. Again, the obvious „support-range“ with the green rectangle!
On the upside, there is much potential to close the open gap from 26146-25134.
The daily chart shows a massive change of trend intraday, which should lead to the conclusion, that a first leg of „selling-panic“ has come to an end short term. As long as Friday`s low keeps valid, a possible area of advance could be at the 0.382 Fibo @ 25059, which is close to the open gap, based on the weekly view! More bullish recovery potential exists! Note, that STOCH has change the short-term trend to the upside and crosses its the signal line up!
For this view, the low @ 24117.90 must be valid!
Be patient, stay tuned...
Have a great weekend...
ruebennase
