Hang Seng Elliott Wave Analysis. As on 26 Dec 2019. CMP 27,864
The Hang Seng Index deserves special mention, and a little more than the usual technical commentary.
Hong Kong has seen the greatest unrest in it’s history over the past 6 months.
Economic conditions have deteriorated significantly in the past few months. (Familiar ? Similar story in India).
It’s largest economic sectors – property prices, retail, and tourism have been hit hard.
It’s lifeline – the subway system MTR (Mass Transit Railway), has been badly affected with protests rocking the city.
From a fundamental perspective, the stock market should have collapsed. Instead, since our previous post of 11 Oct when price was at 26,271, it is actually UP by 6%.
From an elliott wave perspective, the choppy rally makes perfect sense.
We have long said – “hypothesis is that price is in wave 3 of an ending diagonal to the upside”.
In fact in previous post we said “On the weekly chart, price could commence a reasonably strong rally soon (in wave C of ending diagonal wave 3).”