Tuesday, 2 June 2009

Hong Kong index ends at exactly 38% retracement of swing high/low


The chart above is a weekly chart for the Hang Seng Index in Hong Kong. Superimposing a fibonacci grid over the historic high from October 2007 and the most recent lows seen last October, and more or less revisited in March, it can be seen that the closing price in Tuesday’s session (June 2nd), which registered a 2.6% decline, is almost exactly at the 38% retracement level of the swing high/low.

While the momentum traders will want to keep pushing further ahead, it would be very surprising to see this index slice through the 50% retracement level in the neighborhood of 21,200, at which there is clear price congestion, without a corrective episode.

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