The Hang Seng Index fell by 749 points or 2.5% in the past five trading sessions to end the week at 25,377. On the other hand the Strait Times Index ended the week at 3,198, down 7 points, or 0.2%. The STI has managed to move above its moving averages, which in turn are moving up in tandem.
See: STI susceptible to weakness in Hong Kong and China
During the week of Oct 18-22, the STI’s quarterly momentum moved above its own equilibrium line, and remains above this level as at Oct 29. ADX is flat but at a high level, which suggests that the index can attempt to gain ground in the week of Nov 1-5. If prices can clear 3,200 convincingly, an upside of 3,345 is indicated from the measuring objective. Support is at the confluence of the 50- and 100-day moving averages at 3,128.
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The HSI whipsawed its declining 50-day moving average (currently at 25,314) and appears poised to move below it. Quarterly momentum is rising but has encountered resistance at its equilibrium line. ADX is falling and at 16, which could indicate a rangebound trend. In sum, the HSI will have difficulty trending broadly higher, but it may bounce off its 50-day moving average towards 26,000 before retreating. Support-cum-breakdown is at 25,314.
See also: STI’s upside from breakout remains valid as risk-free rates fade, but stay watchful for FOMC
