Hang Seng Index Analysis

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).”