History of Comments for Hang Seng Index Hong Kong

2013


29th March: The market is still cheap with a PE of 11. However, in the context of a drifting index the same may be said about earnings for the index constituents: drifting. There are some bearish signs: topping in banking stocks - and some bullish signs - bottoming in CITIC. But essentially, this is a market adrift.

9th December
: Nothing very exciting over the last month. The PE for the index at around 12 is still modest. Reversion to the mean would take the index to its 24-year mean at 30,000. Low volume and bearish targets for some blue chips could easily see the index drift for another few months

21st October: Almost nothing has happened since last month's update. The index has meandered up to resistance at 23,000 but with weak volume. Reversion to the mean would take the index to its 24-year mean at 30,000. Many stocks are showing signs of bottoming. But volume is lacking in blue chips. I would not be surprised if the market keeps drifting for another few months.

16th September: The index is meandering, but the long term log chart is encouraging. Reversion to the mean would take the index to its 24-year mean at 30,000. Many stocks are showing signs of bottoming.

12th August:The index is trending up, after turning nicely at 19,500. The Cheung Kong chart resembles that of the index. But other blue chips face resistance. These include HSBC and Hutchison.

1st July: Short term and arithmetic scale charts are ambiguous. They show targets with further downside but good support. The long term log chart for the index is clearer. It shows a very good support at the recent low, suggesting that the index is bottoming. The PE chart supports that conclusion.

The Shanghai Composite closed on previous low support, giving rise to the chance of bottoming at the current level.

29th April: The index and many blue chips turned on good supports, suggesting that the last few weeks of weakness are behind us.

25th March:
The index is still cheap. But there is not much buying interest making targets less likely.

18th February:
The index broke out from the bottom with target of 27,000. Volume is improving and the PE for the index is still modest. Reversion to the 24 year mean would take the index to 29,000 or a bit higher. Target of 27,000 is therefore not unrealistic.
Shanghai has made a small bottom. But it's not big enough to reverse the three year bear trend. We could see this index bottoming for another six months with 2,400 being a resistance point. Reversion to the 8-year mean could take this index to 3,100.

11th January:
The index broke out from the bottom with target of 27,000. Volume is improving and the PE for the index is still modest. Reversion to the 24 year mean would take the index to 29,000 or a bit higher. Target of 27,000 is therefore not unrealistic.
Shanghai has made a small bottom. But it's not big enough to reverse the three year bear trend. We could see this index bottoming for another six months with 2,400 being a resistance point. Reversion to the 8-year mean could take this index to 3,100.

2012

10th December:
The index broke out from the bottom with target of 27,000. Volume is not good. Accordingly the index could easily hesitate and fail target. But the PE for the index is still modest and reversion to the 24 year mean would take the index to 29,000. Target of 27,000 is therefore not unrealistic.

5th November: The index broke out from the bottom with target of 27,000. Volume is not good. Accordingly the index could easily hesitate and fail target. Keep an eye on the global trend. If it turns bearish it is unlikely that Hongkong will rally alone.

1st October: Still bottoming. A close at 22,000 on strong volume would the sign of an impending rally.

20th August
:
A small bottom gives a target of 21,500. But volume is weak and this could easily fail. The support on the log chart is good. Best case scenario would be a bit of range trading for a while.

23rd July: A fall to 18,300 would not surprise, as shown in the first chart. Bottoming in September would be the best case scenario.

25th June: The index is well supported, many stocks are on good support or making signs of bottoming and the PE for the index is close to historic lows. Looks like the index is ripe for bottoming.

21st MayThe index failed support on the one year chart, below. Fair support can be found on the log chart. The PE chart shows that the index is cheap by historical standards. I don't expect the market to fall precipitously.

2nd AprilThe index is testing support at around 20,500. A small top could see a fall to as low as 19,250.

26th MarchThe index is testing support at around 20,500. A small top could see a fall to as low as 19,500. Weakness in some stocks has already seen cancellation of bottom targets.

19th MarchThe index and many stocks have pulled back to the neckline of their respective bottoms. Let's see if we get the expected rally this week or next and a breakout for the index from the 21,700 resistance.

12th MarchThe index and many stocks have pulled back to the neckline of their respective bottoms. Let's see if we get the expected rally this week or next and a breakout for the index from the 21,700 resistance.

20th FebruaryNow testing resistance at 21,500. Lots of stocks bottoming. The market has clearly reversed and is now in a clear bull trend.

13th FebruaryNow testing resistance at 21,000. Lots of stocks bottoming.

6th FebruaryAll signs suggest that the index and many stocks are bottoming.

30th JanuaryMore of the same from last week: The index and many stock charts have made small bottoms. There is now a good chance that the index has bottomed and a medium term bull is in progress. What we need to see now is a consistent increase of daily turnover for the index. HK$100 billion per day or more would be desirable.

23rd January: The index and many stock charts have made small bottoms. The top on the weekly chart is cancelled. There is now a good chance that the index has bottomed and a medium term bull is in progress. What we need to see now is a consistent increase of daily turnover for the index. HK$100 billion per day or more would be desirable.

16th January 2012: More evidence of bottoming as many stocks are making bottom scenarios and the index has broken a medium term resistance. But nothing persuasive yet. No sign of increasing volume yet.

The daily chart shows a bottoming scenario with second bottom around 17,000. The weekly chart has a target of around 15,400. The Hang Seng Index PE for December was around 10. That's close to the historical low, suggesting that the index is currently bottoming, or close to bottoming. I doubt that we'll see 15,400.

9th January 2012: The index is struggling on resistance in pink in the first chart. There are some signs of possible bottoming among blue chips. But others still have downside targets.

The daily chart shows a bottoming scenario with second bottom around 17,000. The weekly chart has a target of around 15,400. The Hang Seng Index PE for December was around 10. That's close to the historical low, suggesting that the index is currently bottoming, or close to bottoming. I doubt that we'll see 15,400.

2011


19th December: The daily chart shows a bottoming scenario with second bottom around 17,000. The weekly chart has a target of around 15,400. The Hang Seng Index PE for November was around 9. That's close to the historical low, suggesting that the index is currently bottoming, or close to bottoming. I doubt that we'll see 15,400.

13th December: The daily chart shows a bottoming scenario with second bottom around 17,000. The weekly chart has a target of around 15,400. The Hang Seng Index PE for November was around 9. That's close to the historical low, suggesting that the index is currently bottoming, or close to bottoming. I doubt that we'll see 15,400.

28th November:
The daily chart shows a bottoming scenario with second bottom around 17,000. However, the weekly chart has a target of around 15,400. It is difficult to reconcile these two. Many blue chips have further to fall.

14th November:
No major change to the daily chart. But the weekly index has turned on neckline, giving a bearish outlook. Bluechips such as HSBC and Hang Seng Bank also looking still bearish.

7th November:
The sharp rebound gives rise to the scenario of a second bottom. This is just a guess at the moment.

31st October:
The index has rallied above top neckline (green) and broken out of the bearish channel (orange in the first chart). However there is no bottoming pattern for the index and many blue chips, such as HSBC and Sun Hung Kai, are trapped under strong resistance. Another period of bottoming would not surprise.

25th October:
The index is still trapped in a bearish channel. Only a close above the double resistance 19,000 would cancel the top with bearish target of at least 15,400. Stocks support the still bearish trend.
  
10th October:
The index is near support at around 15,700. The long term log chart suggests that the index will not fall much below the 15,000 level, despite top targets to the contrary.

3rd October:
The index is well supported but target is at least 14,500 on the daily chart and 15,400 on the weekly chart. PE for the market is now 10, which is very close to the historical low of 8. Another 20% fall for the market would bring the index down to a PE of 8, which would be a bargain.

26th September:
The index failed neckline support at 19,000. Log target is around 14,500 on the daily chart and 15,400 on the weekly chart.

19th September:
The index is still testing support at around 19,000.

12th September:
The index is still testing support at around 19,000. But many blue chips are subject to clear tops, suggesting that support at 19,000 will break.

5th September:
The index is still testing support at around 19,000. Cheung Kong is weak. Banks are supported.

29th August:
The index is now testing support at around 19,000. If it fails, worst case scenario would be around 13,000. Cheung Kong, Swire Pacific, Hysan Development and Wharf all look bearish.

22nd August:
The index is now testing support at around 19,000. The weekly chart has a marginal breakout. If we get a lower close this week, it's likely that the index will fall to around 15,500. Cheung Kong supports the bearish scenario.

15th August:
The index is now testing support at around 19,000. It will either build a bottom at this level or the support will fail and we will see a drift to 15,500, or thereabouts. Blue chips favour the weaker scenario, with Cheung Kong having a target of around 85.

8th August:
The index has failed support in the first chart. Target of 19,500 is likely. Many stocks have made tops and show bearish targets.

1st August:
Bottoming chance shown in the first chance. Bullish support from Cheung Kong.

25th July:
Bottoming chance shown in the first chance. Bullish support from stocks such as Hutchison and Bank of China.

19th July:
The index is testing good support but many stocks suggest further downside.

4th July:
Chance of a bottom for the index. The top in the first chart could easily fail, as a similar top failed last year. The PE for the index is now in the bottoming zone. Of course the market could go lower if the global trend turns bearish. But the opposite is now the case - at least for the short term. Cheung Kong has turned on a good channel support, giving further evidence for the prospect that the market has bottomed.


27th June: 
The index pulled back to resistance at 22,500. Quite likely we will see a test of support at 21,500 in the next  week or two.

13th June: 
The index is retesting support at 22,250.


4th June: 
The index is caught in two conflicting trends shown in the first chart. A fall to 22,500 would break the bullish trend that started a year ago. Consolidation at the current level would give a chance at strong resistance at 24,000.


30th May: 
The index is caught in two conflicting trends shown in the first chart. A fall to 22,500 would break the bullish trend that started a year ago. Consolidation at the current level would give a chance at strong resistance at 24,000.


16th May: 
The index looks like it's heading back to range support around 22,500. The PE chart for the Index confirmed 13 last month, suggesting that the market is still safely in the trending zone.


2nd May: 
The index is still stuck in its range. Nothing very exciting to report until 24,500 breaks upside or 22,500 breaks downside.


24th April: 
The index is still testing the upper boundaries of its channel. A breakout above 25,000 would suggest a continuation of the bull trend.


9th April: 
The index is testing the upper boundaries of its channel. A breakout above 25,000 would suggest a continuation of the bull trend.


21st March: 
The index is testing support just under 22,500. A close at 22,000 would suggest a fall at least to 20,000. The MSCI chart is still bearish.


14th March: 
The index is stuck in a range, as it was last year. It needs to break 25,000 or 22,500 in order to start trending again.


28th February: 
The index will top if support at 22,500 fails. The MSCI Hongkong index has already failed a similar top. (You should show this etf chart)


21st February:  The turn last week at around 22,600 confirmed a new bullish channel for the index. Let's see if it holds this week.

14th February: 
The index is testing support at the current level. Failure of support at the current level could see a fall back as low as 20,500. Stocks are mixed. Many have topped. We could see a few months of weakness. However, I doubt that the long term bull trend will reverse while the PE for the market is 15.

7th February:  The index turned on a new support. Let's see if it holds.

31st January:  A bit of support at the current level. But nothing very exciting.

24th January:  The index turned at 24,500 giving the possiblility of a bearish channel, shown in the first chart, below. Some encouragement perhaps from HSBC and Cheung Kong

10th January 2011:  The index broke out of a small bottom shown in the first chart. But it's nothing to get excited about. The index is more likely to be stuck in a range in the short term.



2010
20th December: Breakout from a small top in the first chart reduces chances of target of 26,000. There are still many bullish signs: Cheung Kong has a bullish target and other blue chips are on good support. On the other hand there are quite a few stocks that have reached long term resistance. Swire Pacific could be topping.

On the bullish side, the PE for the index is still in the trending range (see chart below). I would not expect a long term top at the current level. However, we could see further falls in the short term, perhaps 22,250. Worst case would be 20,500.

5th December: Turn on support at 23,000 gives renewed hope for target of 26,000.

29th November: A bit of disappointment as HSBC failed a support, suggesting the stock and the index could well fall back into a range, rather than rallying to target.

22nd November: The index turned on support at around 23,000. Target of 26,000 is still good. Check the long term log charts for various blue and red chips below. They show strong resistance approaching.

16th November: The index turned on a double resistance last week. Target of 26,000 is still good. But many blue chips are stuck on resistance.

30th October: The index pulled back last week to just below 23,000. Most blue chips still look strong. I would expect the index to hold at 22,000 or higher.

25th October: The daily chart has broken resistance at 23,000. I now expect resistance at 26,000 to be tested. The Shanghai index is most likely bottoming although there is strong resistance at the current level.

18th October: The daily chart has broken resistance at 23,000 as expected last week (following the weekly chart). I now expect resistance at 26,000 to be tested . Strong daily turnover supports the index. PE for index is still modest. These factors support the target.

The bearish top for the Shanghai index has now been cancelled. There is still strong resistance to be overcome.

11th October:   The weekly chart has made a new high suggesting that the daily chart will soon follow. Bullish targets for blue chips such as Cheung Kong and Hutchison confirm this conclusion.

4th October:  No change for the index, which is still testing resistance at the current level and up to 23,000. A break from 23,000 would give a high degree of confidence that the index is trending higher. But many blue chips are making new highs. I expect 23,000 to break soon.

27th September:  The index is still testing resistance at the current level and up to 23,000. Only a break from 23,000 would give a high degree of confidence that the index is trending higher. Blue chips such as Cheung Kong, Hutchison, Swire Pacific A and Wharf are all trending higher. It is quite likely that the index will follow.

20th September:  The index has broken out of a bearish channel that has defined its movement throughout this year. The MSCI Hongkong index and several blue chips are already showing evidence of bullishness. We can be cautiously bullish about the market.

30th August:  The index needs to break 22,000 in order to shrug off the current bear.

23rd August:  The index turned on bearish resistance. There are still a few stocks with bullish charts to give hope for the upside. Hutchison is one such. China Resources another.

9th August:  The index is still in a down trend. But there is a good chance that this bearish channel will break. There are already some bullish stock breakouts. And if the US markets are going to retest previous recent highs, I would expect the same for the Hongkong market. China is still a bit uncertain. We have a bearish target. The Shanghai index needs to rally to 2,800 before we can cancel it.

12th July: Last week's comment applies: The index is still adrift. However, I expect the market to take the lead from the US which is now clearly in a bear market.

5th July: The index is still adrift. However, I expect the market to take the lead from the US which is now clearly in a bear market.

28th June: The index drifted a little higher in its range. The second chart is interesting. It shows a topping pattern that we have seen on the same resistance twice before in the past 13 years. But that resistance was broken in 2008. It could easily break again. The best thing to do is wait and see.

22nd June: The index turned on channel support as shown in the first chart. The channel in the first chart suggests that the index has been in a mildly bearish trend since December last year. But the chart could also be interpreted as a range since around July last year. Many blue chips are also stuck in a range. A range is the absence of a trend. It requires the breakout upside or downside before the market starts trending again. We have to be patient.

14th June: A turn on channel support giving rise, perhaps to a short term rally. But the top danger is still real. A fall below 19,000 would set off the top. See the Hang Seng Index stock Tencent, below. It shows a magnificent double top.

7th June: A clear fall below 19,000 would confirm target of around 16,000.

31st May: Ambiguity on the daily chart for the Hang Seng. But a close, one Friday, below 19,500, would be a clear breakout from a top on the weekly chart. Many stocks have topped and are looking dangerous. The Shanghai Composite Index has clearly topped.

10th May:  The Hang Seng Index broke bull trend support. It is now in a range. The Shanghai SSEC is in danger of breaking a major top. Several interesting long term charts: which are the best long term investments?

3rd May:  The Hang Seng Index is still in a bull trend. A fall below 20,000 would break the trend. The Shanghai SSEC appears to be topping but it could easily be in a range.

26th April:  There are many top scenarios for blue and red chips - but no confirmed tops. The market could go either way.

20th April:  The index needs to make a new high before we can be confident of a return of the bull trend. The same can be said of blue chip stocks.

22nd March:  The index rallied above the neckline of our double top. The top is cancelled. But there is still a danger of a larger top forming as shown in the first chart unless we see resistance break at around 22,000. See the first chart.

8th March:  The index turned on the 21,000 level, so our bearish scenario is still in tact. A close at, say, 21,500 would be sufficient to shrug off the bearish scenario and give consideration to a bullish continuation. However, we would still have to consider a double top unless the index passed the previous recent high of around 23,000.

22nd February:  The index is still in its range. Nothing very exciting last week. The outlook is still more bearish than bullish.

15th February:  The index rebounded at 19,500. We still have a target just below 19,000. Resistance at 21,000 is strong.

8th February:  The index is moving to target. Support at 19,500 might give some respite. Many blue chips have topped. Some are testing support analogous to that of the index at 19,500.

25th January:  The index has broken a top, confirmed by a fall below 20,000. Blue chips such as Wharf and Swire Pacific have made clear double tops.

18th January:  The index has been in a range for the past few months. Until we see a breakout of either 21,000 or 23,000 there really isn't much to say about the index. Stocks are mixed: some bullish, some bearish.

11th January 2010:  The index has made a new bullish channel. But PE for the index is approaching the high side of the historical range. Hutchison has made a surprise rebound and broken a long term resistance. HSBC is still testing long term resistance. A rally to 95 would auger well for the bank and the market.



2009
19th October:  Possible resistance in the second chart. Otherwise the Hang Seng Index appears to be moving along its bullish channel nicely (first chart). Next resistance at 23,000. The Shanghai index is well supported. Petrochina has made a nice breakout upside. But other red chips appear to be topping.

3rd August:  The index is now testing resistance at the current level. I'd be surprised if the resistance passes. But many individual stocks have already passed analogous resistances on their respective charts. I could well be surprised.

27th July:  Targets are now done and the index is approaching resistances on many charts - except one, the weekly chart, which shows a nice breakout. Still, I'd be surprised if the index had more than 10% upside before topping.

Current target

Medium term: 1. double bottom (weekly) points to 18,500 - done
                         2. double bottom (daily) points to 20,000 - done

20th July: Last week saw the index break a mild resistance in the first chart and many blue and red chips turn on neckline supports of double bottoms. Good chance for the rally to continue and the index to reach target of 20,000. Resistance on the weekly chart is the major obstacle. A close above 18,800 would pass that resistance.

Current target

Medium term: 1. double bottom (weekly) points to 18,500 - done
                         2. double bottom (daily) points to 20,000

12th July: The index is still in a bullish channel, but if it slips below 17,500 there is a good chance that the medium term bull is finished.

6th July: The index is still in a bullish channel, but if it slips below 17,500 there is a good chance that the medium term bull is finished.

29th June: The index and many blue and red chips are testing previous recent highs. See the charts below. All have higher targets which we may expect provided the resistances made by previous highs are broken.

22nd June: The index fell a few points last week. But most of the stocks that I follow pulled back to the neckline of their bottoms in an orderly way. The rally still looks to be in tact.

15th June: The index is still heading for target of 20,000. Note the target on the log scale chart is above 23,000. I would prefer to be conservative and stick with 20,000.

Current target

Medium term: 1. double bottom (weekly) points to 18,500 - done
                        2. double bottom (daily) points to 20,000

1st June: The index is heading for target of a clear double bottom. Blue chips such as Cheung Kong and Swire Pacific have made good bottoms similar to those of bottoms in previous bear markets. They confirm the clear reversal for the market.

Current target

Medium term: 1. double bottom (weekly) points to 18,500
                         2. double bottom (daily) points to 20,000

11th May: The index has broken out of a clear double bottom on persuasive volume. Expect 20,000 in the next few weeks or months and a high probability that the bear market has ended.

Current target

Medium term: 1. double bottom (weekly) points to 18,500
                         2. double bottom (daily) points to 20,000

2nd May: Still waiting for a breakout from the daily chart. The weekly chart has already broken out of a nice bottom and gives encouragement for a breakout on the daily chart. Some encouraging blue chip breakouts last week give more evidence to support the proposition that the market is now in a strong bull trend.

Current target

Medium term: double bottom (weekly) points to 18,500

27th April: The daily Hang Seng Index chart looks ripe for breakout. The weekly chart has already broken out and is likely a leading indicator. I would expect the Hang Seng index to break out of its bottom in the next week or two. There are many bottoms in blue chip stocks and red chips with sufficient volume to persuade that the market is turning from bear to bull.

Current target

Medium term: double bottom (weekly) points to 18,500

20th April: The daily Hang Seng Index chart looks ripe for breakout. The weekly chart has already broken out and is likely a leading indicator. I would expect the Hang Seng index to break out of its bottom in the next week or two. There are many bottoms in blue chip stocks and red chips with sufficient volume to persuade that the market is turning from bear to bull.

Current target

Medium term: double bottom (weekly) points to 18,500

13th April: Encouraging action over the last two weeks gives cause for hope that the index is bottoming. However we need a breakout from the neckline of the bottom in the first chart and a breakout from the resistance in yellow in the same chart. Daily turnover needs to pick up too. In short, we need to see 16,500 break on volume of around 100 billion dollars per day in May. Some stocks are already giving encouraging signals. Sun Hung Kai, for one, is already ahead of the index and has given a clear bullish target.

Current target

Long  term: none

23rd March: The index turned nicely after retesting the previous low. Let's see now if we get the bottom outlined in the first chart below and volume. We need to see daily turnover exceed fifty billion dollars per day in order to confident of a bottom at the current level.

16th March: The index turned nicely after retesting the previous low. Let's see now if we get the bottom outlined in the first chart below.

9th March: The index is still supported on the weekly chart and is likely to retest its October low.

2nd March: Volatility has departed from the market. A new chart (third below) shows a 22 year regression line for the index. It shows the index now testing a good support on that chart, giving further hope for bottoming at the current level.

Current target

Long  term: none

23rd February: The market is retesting previous lows but as yet has not tested the low of 11,000. Many encouraging bottoming scenarios amongst blue chips. But it's still a case of wait and see. The support at around 11,300 in the second chart is probably the most important one to keep an eye on.

2nd February: Two long term scenarios are shown in the first few charts: either a bottoming at the previous low of around 11,000, or at the next support (second chart) at around 6,500, which would be the end of the world scenario.

10th January 2009: A small bottom in the first chart gives hope for a rally to 19,000. But the bottom is too small to reverse the long term bear trend. We would need to see a bottom on the scale of that in the second chart; perhaps not quite as big, but at least taking another six months to a year. Note the red resistance in the first and second charts. It defines the current down trend. The earliest we could expect breakout would be March next year. Breakout would be the first stage to a reversal. So my guess would be that, if the market is bottoming at the current level, it will take all next year to do so.



2008
22nd December: A small bottom in the first chart gives hope for a rally to 19,000. But the bottom is too small to reverse the long term bear trend. We would need to see a bottom on the scale of that in the second chart; perhaps not quite as big, but at least taking another six months to a year. Note the red resistance in the first and second charts. It defines the current down trend. The earliest we could expect breakout would be March next year. Breakout would be the first stage to a reversal. So my guess would be that, if the market is bottoming at the current level, it will take all next year to do so.

Current target

Long  term: none

23rd November: Good supports for the index, the PE chart and many blue chips give hope that the index is bottoming at the current level. This is just a hope. It will take months before we can confirm such a bottom. Support at 11,100, on the third chart is the key support.

Current target

Long  term: none

17th November: The index is well above its previous low, while US indices are testing their previous lows. That is a small sign of strength. For how long one cannot say. Otherwise there is nothing much to cling to.

10th November: While we have nothing technical to go on, except a good support on the second chart, the PE for the market, at 8.7, is the lowest that the market has seen since 1988.

3rd November: Sharp falls and sharp rebounds. But there is nothing on the charts to suggest a bottom. A durable bottom would take several months to form.

Current target

Long  term: 1. Weekly chart double top points to (log) 14,600 - done ;  (arithmetic): 11,750 - done
                     2. Daily chart double top (log) points to 14,100 - done; (arithmetic) 10,600 - done

27th October: The log targets for our top are done. The arithmetic targets are less persuasive. More persuasive is the long term support, second below.

Current target

Long  term: 1. Weekly chart double top points to (log) 14,600 - done ;  (arithmetic): 11,750 - confirmed
                     2. Daily chart double top (log) points to 14,100 - done; (arithmetic) 10,600 - confirmed

20th October: The index has done log target. There is good support for the index at the 12,000 level. See supports for the blue chips which would roughly correspond to that level.

Current target

Long  term: 1. Weekly chart double top points to (log) 14,600;  (arithmetic): 11,750 - confirmed
                     2. Daily chart double top (log) points to 14,100; (arithmetic) 10,600 - confirmed

10th October:  Heading to target. One chart updated as of 9th October.

Confirmed tops for the index on the daily and weekly charts. These suggest a fall to the 14,000 region, at least. If these falls are to be interrupted, the most likely point of interruption would be the support at the current level shown on the third chart below. Blue chips tend to support the index top target.

No update next week as I'll be in Hongkong. There are (were at the time of writing) still a few places left for my seminar next Monday so please don't hesitate if you're interested.

Current target

Long  term: 1.Weekly chart double top points to (log) 14,600;  (arithmetic): 11,750 - confirmed
                     2. Daily chart double top (log) points to 14,100; (arithmetic) 10,600 - confirmed

6th October:  Confirmed tops for the index on the daily and weekly charts. These suggest a fall to the 14,000 region, at least. If these falls are to be interrupted, the most likely point of interruption would be the support at the current level shown on the third chart below. Blue chips tend to support the index top target.

No update next week as I'll be in Hongkong. There are (were at the time of writing) still a few places left for my seminar next Monday so please don't hesitate if you're interested.

Current target

Long  term: 1. Weekly chart double top points to (log) 14,600;  (arithmetic): 11,750 - confirmed
                     2. Daily chart double top (log) points to 14,100; (arithmetic) 10,600 - confirmed

20th September: The index plunged to support at around 16,000 before rebounding sharply. The weekly chart shows the index ending flat for the week. But many blue chips indicate that there is still a danger of further falls for the market. What does that mean for the market? (Sign up for my seminar and find out!)

Current predictions

Long  term: Weekly chart head and shoulders top points to (log) 14,600;  (arithmetic): 11,750 - not yet confirmed

15th September: The daily chart has broken out of a double top pointing to 14,000. There are still important supports to break before we can confirm the target. But there are many tops occurring in blue chips, giving further evidence for the fall.

Current predictions

Long  term: Weekly chart head and shoulders top points to (log) 14,600;  (arithmetic): 11,750 - not yet confirmed

8th September: The first chart, a daily chart, shows a top threatening to break. But the second chart, the weekly chart covering the same period as the first, shows the top broken. The weekly chart is usually a leading indicator. That means that the daily usually follows the weekly chart. Although the breakout on the weekly chart is marginal, it's a bearish signal, suggesting that the market is likely to fall another leg down. The target for the top is around 14,000. However, I wouldn't be getting excited about this target. The top has defects and there is good support at the 18,000 level.

Current predictions

Long  term: Weekly chart head and shoulder top points to (log) 14,600;  (arithmetic: 11,750)

25th August: Failure of support at 21,000 gives further impetus to the bearish scenario in the first chart.

18th August: Testing support at 21,000, a very important support. If the support fails, the market is likely to enter a new bear phase. But the support is very good, as the long term log chart shows.

28th July: Nothing much last week. If we are to see a bottom, as suggested in the first chart, it should take a few more weeks or months to form.

14th July: A nice little turn at 21,000. Possible bottoming in the first chart. Let's wait and see.

7th July: The index is still supported. The PE for the index last month was at the bottoming zone. But there are some nasty topping scenarios for a few blue chips, not yet broken out. But dangerous.

30th June: Bottoming chance now, as shown in the first and second charts. Low PE for the index helps the chances of bottoming.

12th May: A bottom in the first chart would mark an end to the bear trend provided the index stays above the support at around 24,700. If the index falls much below this support, we would more likely be looking at a longer bottom, as suggested by the second chart.

5th May: Again, no major chance last week. The index is still testing good long term supports. There is still a chance of bottoming around the previous low. But there is no good sign of bottoming yet.

28th April: Again, no major chance last week. The index is still testing good long term supports. There is still a chance of bottoming around the previous low. But there is no good sign of bottoming yet.

Current prediction
Short term: none

Medium term: none

Long term: log target of 41,600, if the gods be tempted

21st April: Again, no major chance last week. The index is still testing good long term supports. There is still a chance of bottoming around the previous low. But there is no good sign of bottoming yet.

Current prediction
Short term: none

Medium term: double top points to 21,400 (log) - done, 20,400 (arithmetic)- good as done

14th April: No big change last week. The index is still testing good long term supports. There is still a chance of bottoming around the previous low. But there is no good sign of bottoming yet.

Current prediction
Short term: none

Medium term: double top points to 21,400 (log) - done, 20,400 (arithmetic)

Long term: log target of 41,600, if the gods be tempted

7th April: The index and many stocks are now on good long term support, giving rise to hope that the worst of the current bear trend is over. But the index is facing strong resistance and although a possible bottoming pattern is shown in the first chart, volume is not persuasive.

There are good supports for the index on the long term log-scale index chart and the corresponding ETF chart, EWH, which represents the MSCI Hongkong index. Both of these charts show good long term support at the current level. The EWH chart shows the current bear market as a mere pullback to a long term double bottom. The current level would be a likely bottom under that scenario.

The PE chart shows that the index closed last month with an average PE below 15. 12, or just above that level, forms a good support.

In order to be confident that the bear has run its course, we need to wait for a good bottoming signal. This market usually gives such a signal. So let's be patient, even if it takes a couple more months.

Current prediction
Short term: none

Medium term: double top points to 21,400 (log) - done, 20,400 (arithmetic)

Long term: log target of 41,600, if the gods be tempted

31st March: The index is testing resistance on the first chart. It has made no sign of a bottom. However, there are many good long term supports to be found: the log charts for the index and the ETF fund EWH, as well as many stocks such as Cheung Kong, Hutchison, China Netcom and Sinopec. So there is good cause to hope that the index is close to a bottom.

Current prediction
Short term: none

Medium term: double top points to 21,400 (log) - done, 20,400 (arithmetic)

Long term: log target of 41,600, if the gods be tempted

24th March: The index fell further towards target.

Current prediction
Short term: none

Medium term: double top points to 21,400 (log) - done, 20,400 (arithmetic)

Long term: log target of 41,600, if the gods be tempted

10th March: The index turned on resistance last week and headed down. We have a target of 21,400. Good support is at around 20,000. Possible interruption on the log charts at any time.

Current prediction
Short term: none

Medium term: double top points to 21,400 (log), 20,400 (arithmetic)

Long term: log target of 41,600, if the gods be tempted

3rd March: The index closed on resistance in the first chart. A fall today would suggest a continuation of the bearish trend. The second chart suggests that the index is in a long term bull market with good support at 18,000, or thereabouts. I would be surprised if the index fell below this level. (But surprising things happen with stock markets).

Current prediction
Short term: none

Medium term: double top points to 21,400 (log), 20,400 (arithmetic)

Long term: log target of 41,600, if the gods be tempted

25th February: The outlook is ambiguous. In the first chart, there is a clear downside target of around 21,400. However, in the second chart, there is strong support at the current level, in the context of a very bullish long term pattern. I prefer the bearish picture in the first chart provided resistance doesn't break.

Current prediction
Short term: none

Medium term: double top points to 21,400 (log), 20,400 (arithmetic)

Long term: log target of 41,600, if the gods be tempted

21st January: The top in the first chart has broken out. It's not yet confirmed. We would require a pullback to 26,000 and a turn to confirm the neckline. But it's quite likely the index will fall to the 22,000 level over the next few weeks, given the severity of the breakout with gap. The arithmetic target for the top is as low as 20,400. However, unlike the tops in the US, the top for this market is less likely to reverse the current long term trend. The breakout from the 17,000 level last year was a major breakout. There's a good chance that a plunge in the next few weeks would be a mere "correction". Let's see what happens by mid-February.

Current prediction
Short term: none

Medium term: double top points to 21,400 (log), 20,400 (arithmetic)

Long term: log target of 41,600, if the gods be tempted

14th January: The index is making a topping pattern. It has not yet broken out. The PE chart shows that at 21 the index is in the 'danger zone'. A fall below the neckline would therefore have a good chance of seeing a fall to 22,000. On the other hand, the index could easily consolidate at the current level and rattle on higher. Let's see.

7th January 2008: The index is making a topping pattern. It has not yet broken out. The PE chart shows that at 21 the index is in the 'danger zone'. A fall below the neckline would therefore have a good chance of seeing a fall to 22,000. On the other hand, the index could easily consolidate at the current level and rattle on higher. Let's see.

Current prediction
Short term: none

Medium term:  none

Long term: log target of 41,600, if the gods be tempted



2007
17th December: Nothing really significant last week. We haven't really got a second top, as shown in the first chart. So there is no indication of an impending reversal to the long term bullish trend - despite the PE for the Hang Seng Index getting close to historical highs. Some interesting long term log charts suggesting some long term upside.

Current prediction
Short term: none

Medium term:  none

Long term: log target of 41,600, if the gods be tempted

19th November: Nothing to suggest that the sky is falling. Log scales on long term charts give more potential upside. I'm not sure whether such targets are reliable. But it will be interesting to watch.

Current prediction
Short term: none

Medium term:  none

Long term: log target of 41,600, if the gods be tempted

12th November: Nothing much more than volatility at present. It could take a while before we get clear signals. Only the first chart is updated this week.

5th November: Our target of 31,000 is done. I'm quite amazed at the speed of the target being reached. What next? the PE for the Index is approaching 25. This is in the danger zone, as our histogram on the PE chart shows. But the PE chart shows that the index has stayed in the danger zone for ten months before topping. We are now in month two. This suggests that, although we are in the danger zone, there is no immediate danger of an impending long term reversal.

While we have no more targets for the index, there are still targets for my favourite laggards, Cheung Kong and Hutchison. Financials, which make up the largest sector of the Hang Seng Index, are also lagging. HSBC is still below its 2006 high of 150. Thus there is still room for the index to rally.

Current prediction
Short term: none

Medium term:  none

Long term: double bottom (pink) points to 31,000 - done

15th October: The index added another new high to its current meteoric trajectory, undaunted by the day reversal of the previous week, or the penetration of the index PE above the 20 level. Take a look at the weekly chart. The index is now testing the outer limit of a resistance band. Many blue chips are now approaching long term targets. Could this be the point of reversal? Maybe. Maybe not. Our survey of major reversals for the market over the past 20 years suggests that we should have enough time and sufficient warning when the market finally reverses. More dangerous to anticipate a reversal than to wait for clear signs. Take a look at the India page for an example of a market that just keeps on going. Indonesia is another example.

Current prediction
Short term: none

Medium term:  none

Long term: double bottom (pink) points to 31,000

8th October: Our first target of 28,000 is done. That was the most reliable target. The target of 31,000 still has a fair chance. But it is less reliable, with its sloping up neckline, than the horizontal neckline version. Why? They both cover the same period of time. Thus the 28,000 version is more conservative. Given the meteoric rise of the index over the last seven weeks, I'm feeling a bit dizzy as the Hang Seng behaves wildly. We've seen such volatility before in the tops of 1997 and 2000: wild swings. Down five percent today, up five percent tomorrow. Two major tops started with this phenomenon.

The other phenomenon that causes concern is the one day reversal last Wednesday. This was a rare example. It occurred on record volume. Thirty percent higher volume than that of any other trading day. Unlike the text book case, where the index zooms ahead and ends back where it started for the day, this example ended much lower. Some theoreticians claim that all major reversals start with such a reversal. That of course doesn't mean that all day reversals lead to major trend reversals. (That would be affirming the consequent, an invalid form of reasoning.) There's a bit of discussion on this subject below, with a link to a couple of sites on day reversals. I would merely say that the event raises a warning flag.

Another warning sign: PE for the index last month crossed the 20 level. Three of the last four major tops in the past twenty years were characterized by a PE for the index crossing the 20 level. The other top saw the PE level rise to 19. September's PE spiked above the 20 mark. Something to watch.

On the other hand, many blue chip stock charts are still bullish. Cheung Kong might just have started a new long term bullish rally that would see 200 by the end of next year. Henderson Land is another. HK Bank is also looking bullish, as is HK China Gas. These stocks suggest that a new phase of  bull market has just begun. And there are others.

So where does that leave us? Vertigo - not a reliable indicator of stock market trends; a few warning signals such as high PE and the one day reversal - reason for caution, and a bunch of long term bullish signals in blue chips: cause for long term optimism.

Next week we'll look at the long term reversals over the past 20 years and see what use our analysis would have been and whether we can expect warning signals when the current bull trend turns as inevitably it will.

All of this extra effort is inspired by the generosity of recent donors, initials of whom are listed above. So please, keep those donations coming.

Current prediction
Short term: none

Medium term:  none

Long term: 1. double bottom (green) points to 27,500 (daily) and weekly points to 28,000 - done
                    2. double bottom (pink) points to 31,000
1st October: The index has almost reached our first target as shown in the first chart. The next target is 29,000 on the weekly chart. The ETF chart is still outstanding. Stocks this week show a few blue chip laggards that will benefit if the index is going to reach our final target of 31,000. (Well, at least I'm hoping so, as I've piled into these stocks.)

Current prediction
Short term: none

Medium term:  none

Long term: 1. double bottom (green) points to 27,500 (daily) and weekly points to 29,000
                    2. double bottom (pink) points to 31,000

24th September: The index is moving swiftly towards our first target. Stock charts show the power of a breakout from a horizontal resistance.

17th September: The index broke out from long term resistances. No obstacles prevent the index reaching 28,000. As expected, laggards such as Cheung Kong, Henderson and Sun Hung Kai are propelling this surge.

Current prediction
Short term: none

Medium term:  none

Long term: 1. double bottom (green) points to 27,500 (daily) and weekly points to 29,000
                    2. double bottom (pink) points to 31,000

11th September: Dangerous accumulations on resistance in the first and second charts. However, the pullback and turn on the third chart gives confirms the long term target of 31,000, or thereabouts. A lesser target of 28,000 comes from the same double bottom pattern using a horizontal neckline. (See the green pattern in the second chart.) Unless these patterns are cancelled, the long term outlook is bullish. A rally above the resistance at around 24,400 would break the next major resistance and offer confirmation of the target of 28,000.

Current prediction
Short term: none

Medium term:  none

Long term: 1. double bottom (green) points to 27,500 (daily) and weekly points to 29,000
                    2. double bottom (pink) points to 31,000
28th August: The trend is still clearly bullish. Only a big top, as shown in the first chart, would endanger the trend. That would take a month or so develop, if at all. My preference is still to follow the bullish long term scenarios in the long term daily and weekly charts.

Current prediction
Short term: none

Medium term:  none

Long term: 1. double bottom (green) points to 27,500 (daily) and weekly points to 29,000
                    2. double bottom (pink) points to 32,000
13th August: The first chart shows the index in a simple short term bear channel. Some blue chips are testing strong long term supports. If those supports fail, there would be a danger of further falls. But in times of uncertainty, it is perhaps best to keep an eye on the long term weekly chart, which looks quite benign and suggests a long term bullish trend.

Current prediction
Short term: none

Medium term:  none

Long term: 1. double bottom (green) points to 27,500 (daily) and weekly points to 29,000
                    2. double bottom (pink) points to 32,000

6th August: The outlook at present is merely a short term bear trend. If the bear market develops to a medium term trend, we have two scenarios: one to 22,000, the other to 19,000. More time needed to determine the extent of the current trend.

Current prediction
Short term: none

Medium term:  none

Long term: 1. double bottom (green) points to 27,500 (daily) and weekly points to 29,000
                    2. double bottom (pink) points to 32,000
30th July: The steep fall last Friday is of no technical significance. There is good support as low as 21,000. Thus, a fall even to that level followed by a turn would give confirmation of the long term bullish trend. If we are to see a topping pattern, it would be many weeks or months before such a pattern would appear. The second chart contains such a scenario. However, at this stage, chances of such a scenario are remote.

Current prediction

23rd July: Resistance in the second chart is still holding the index back. A pullback to 22,000 followed by a turn would be bullish confirmation of the target in the third chart.

Current prediction

 

16th July: The long term looks highly bullish. Upside is 32,000, as shown in the third chart. However there are obstacles nearby: very strong resistance in the second chart and in the ETF fund chart. The breakout from the ten year channel in the second chart clearly suggests that the market is in a continued bull phase that should last a year or two at least. Any pullback to 21,000, or, worst case, 19,000, in the coming months, should be regarded as a buying opportunity. Hutch is my laggard pick.

Current prediction

 

9th July: A breakout from long term resistance in the third chart below clearly demonstrates that the Hong Kong market is now in a continuation phase of the long term bull market. Analogous resistance at 23,000.

Current prediction

 

25th June: The index has clearly broken out of long term resistance, giving a tentative long term target in the region of 27,000 with next resistance at around 23,000.

Current prediction

 

18th June: The index is now testing the upper range of the horizontal resistance in the first chart. A breakout could be dramatic, given the increasing volume over the past month or two. The weekly chart has almost broken out from very long term resistance. But we need something more persuasive.

Current prediction

 

11th June: The index is still trapped in a range. A fall below the green support in the first chart would likely spell a short term bear market. A breakout above 21,300 would be bullish.

Current prediction

 

4th June: The index is still trapped in a range. The Shanghai index is shown below, by popular request. It shows nothing more than channel. I'm not persuaded that it is a significant market, but I bow to the majority.

Current prediction

 

28th May: Nothing clear to go on: a double top scenario in the first chart would only be signficant if the index fell below support at 20,000.

Current prediction

 

21st May: The long term weekly chart is still trapped under resistance. However, the daily chart gives a more hopeful scenario, suggesting that the bull market might continue up to the 28,000 region over the next couple of years. Blue chips such as Hutchison and Cheung Kong would benefit from such a scenario. Hutchison, for example, is at the same level that it was six years ago. Might be time for a breakout.

Current prediction

  14th May: The index is still testing its highs in the 20,900 region. There will be resistance up to the 22,000 region on the daily charts. However, a break above 21,000 on the weekly chart would give a hint that the bull is likely to continue. Double top on the weekly charts, over the next few weeks, is a danger.
23rd April: The index is now testing its highs in the 20,900 region. There will be resistance up to the 22,000 region on the daily charts. However, a break above 21,000 on the weekly chart would give a hint that the bull is likely to continue.

2nd April: Good supports for the index and many blue chips. Consolidation could take many months.

Current prediction

 

2nd April: Good supports for the index and many blue chips. But there is still the danger of a long term reversal, as shown by the long term daily charts.

Current prediction

12th March: Possible channel support at the current level. But too soon to say. The EWH fund has turned on a very good support, as have one or two blue chips. These are encouraging signs. But lets wait for further evidence of a bottom at the current level. There is still a danger that the index is making a long term top. It would take many months for that danger to pass.

5th March: The index has turned on long term resistances, as expected. But a turn does not make a reversal. There are many stocks now testing important supports and many bullish scenarios among blue and red chips that are now being tested. On the other hand, the long term resistance that turned the market is a likely place for a top, if a top is to occur. Volatility is often a precursor to a top. So we should be on the alert. It could be a few weeks before the dust settles.

19th February: Last week's comment prevails:Strong long term resistance on the long term weekly and daily charts. The index must breakout from these strong resistances before we can be confident that the current bull trend will continue. The weekly chart is especially clear. A close, one Friday, above 21,000, would break out from the resistances on that chart. The alternative would be a topping pattern in the months to come.

12th February: Strong long term resistance on the long term weekly and daily charts. The index must breakout from these strong resistances before we can be confident that the current bull trend will continue. The weekly chart is especially clear. A close, one Friday, above 21,000, would break out from the resistances on that chart. The alternative would be a topping pattern in the months to come.

29th January: The market is testing long term resistance at around 21,000. Good chance that we will see continuation and breakout upside. On the other hand, the market could take a few months to make up its mind.

Current prediction

 

22nd January: Nothing very clear in the index. However, a breakout in the Cheung Kong chart suggests long term upside for this bellwether stock and hopefully, for the market as a whole.

15th January: Very strong resistance in the second chart gives rise to the prospect of a top at the current level. A rally to 21,500, or thereabouts, would pass the current long term hurdle. HSBC is on good support. Watch that support. If it breaks, there is a fair chance that the bull will stall. Note, however, that the market is not characterized by the wild volatility that characterized the previous long term reversals.

8th January: The daily chart shows strong resistance, giving cause for concern that the long bull trend might be coming to an end. However, there are good signs that the index will break out of the strong resistance and continue in bull mode, albeit with emphasis on different stocks. Evidence for continuation can be found in the weekly chart, which has broken a long term resistance similar to that of the daily chart; the ETF, EWH which has broken out of a long term double bottom; and various blue chips which have broken out from long term reversal patterns: Cheung Kong and Hutchison are two examples.


2006

18th December: The weekly chart shows resistance at the current level. The Daily chart would suggest further upside. We shall keep an eye on the weekly chart, which is usually a leading indicator. Spectacular action from Hutchison, which has hitherto been a laggard.

Current prediction

 

11th December: Possible short term bearishness in the first chart. But good support for HSBC and China stocks are strong.

4th December: Long term bullish signals from the HK ETF, EWH and Cheung Kong.

20th November: Quite likely that the index is heading for long term resistance in the lower 20,000 region (ie, somewhere around 21,000). Thus, next year, we are either going to see the index break out of a long term resistance and head for the upper 20,000 region, or top, and fall back to the lower teens (11,000 being the downside). Perhaps Cheung Kong will give us some indication. See the chart below.

13th November: The index shows further upside on the long term chart. But the fund chart shows strong resistance at the current level.

6th November: A strong breakout from a resistance in the daily chart is highly bullish.

30th October: The index passed the hurdle at 18,000 and now is resting under another strong resistance. However, the weekly chart shows a breakout from a comparable resistance, suggesting a clear run up to the upper 19,000 region. The weekly chart is to be preferred in times of ambiguity.

16th October: Resistance in the first chart is still the operating obstacle. We either see a turn at the current level or a breakout upside.

9th October: Mixed signals: The index has broken a strong long term resistance in the third chart, but faces resistance made by the all time high in 2000. Stocks are also mixed: some, such as HSBC, are highly bullish, others appear to be struggling with resistance.

2nd October: Still facing strong long term resistance in the first chart. Danger of a major reversal will continue until the index passes 18,000.

Current prediction

25th September: The trend is bullish. But the index is encountering strong resistance at the current level. If the index turns at this level and falls to around 16,800, the chances are that the bull trend will have ended.

18th September: The index is still subject to a double top danger.

11th September: A very bearish scenario in the second chart, followed by a longer term scenario of equally bearish import in the fourth chart, followed by a bearish scenario for HSBC and a couple of other blue chips. One tries to be balanced while the outlook is ambiguous, as it is now. However, the balance appears to be tipping to the bear. The only bullish scenario is that in the third chart. However, falling volume since May tends to favour the bearish scenario.

28th August: More bearish signs as the index fell from a rising wedge (first chart). Strong resistance in the second chart gives rise to a double top danger.

21st August: Bearish scenario for the index in the next few weeks unless we see a rally above 17,600 on good volume. Some stocks have bullish scenarios. However, the danger is that the upside will be limited to a month or two.

7th August: The index is now in the danger zone as a double top scenario could eventuate. See the first chart. Only a new high and much higher volume would avert the danger.

17th July: Bearish scenarios for the market could see the index fall to as low as 13,600 in the next few months. Bearish scenarios for many blue chip stocks.

10th July: Bullish and bearish scenarios make the current environment confusing. Nor do stocks: many appear to be topping, others appear to be bottoming. A few more weeks might resolve the situation.

3rd July: A nice bottom in the first chart suggests that the bull is back on bullish track. However, if volume starts to fall off, we should beware a big double top, as outlined in the first chart.

26th June: The index is well supported and many blue chips are sitting on good supports. Thus there is still a good chance that the market is merely correcting while still in a long term bullish trend. However, there is a strong probability that the regional trend is reversing. See Japan and Korea. It would be unlikely that Hongkong would rally if the rest of the region were going lower.

Current prediction

19th June: An impressive rally last Thursday and Friday. But volume attending the rally was lower than that of the falls the previous week, notably the falls on 8th and 1st August. If the index is going to bottom at the current level, we should wait for more encouraging signs.

Current prediction

12th June: The index has fallen back to good support. Lets see if it holds. Only one chart updated this week.

 5th June: Good supports for the index in most charts. But some blue chips look like they have further to fall.

22nd May: The outlook for the market is still more bullish than not. Many nice stock pullbacks. Now a case of waiting to see where the dust settles.

15th May: Nearly all indicators are highly bullish. Some stocks, such as Sun Hung Kai, New World China and China Unicom, appear to be just about to take off. HSBC, on the other hand, has a long term resistance to contend with. A sharp pullback would not surprise.

Current prediction

8th May: Resistance on the short term index chart and on the EWH exchange traded fund, otherwise, the market looks strong. Nice breakout for HSBC. Other stocks are looking promising.

1st May: A breakout from strong long term resistances and ever increasing volume suggest that this market is in a strong bull trend. No target for the index. Resistance on the weekly chart is at around 20,000.

Current prediction
Short term:reverse head and shoulders points at 16,750 - done

Medium term:  none

Long term: none

17th April: No bad news this week. Breakouts are holding from long term resistances from two weeks ago But nothing very exciting either.

Current prediction
Short term:reverse head and shoulders points at 16,750 - not yet confirmed

Medium term:  none

Long term: none

9th April: The index and the EWH charts have all broken long term resistances that were holding the market back for several months. Good chance of more bullish upside, despite the lack of clear targets.

Current prediction

Short term:reverse head and shoulders points at 16,400- done

Medium term:  none

Long term: none
3rd April: No substantial movement for the index. Good support for HSBC but breakout from a double top for Hutchison is mildly alarming.

Current prediction
Short term:reverse head and shoulders points at 16,400. Now questionable.

27th March: The market is dwindling upwards. But there is no clear sign of direction. Keep an eye on the EWH fund chart, fourth below. If the current resistance in that chart breaks, we make expect something impressive from this market.
Current prediction

Short term:reverse head and shoulders points at 16,400. Now questionable.

Medium term:  none

Long term: none

17th March: The index is still in danger of topping. A couple of interesting stock breakouts.
Current prediction

Short term:reverse head and shoulders points at 16,400. Now questionable.

13th March: Short term target of 16,400 is now dubious, after the index dropped substantially last week.  A top scenario replaces the short term outlook.
Current prediction

Short term:reverse head and shoulders points at 16,400. Now questionable.

Medium term:  none

Long term: none

13th March: Short term target of 16,400 is now dubious, after the index dropped substantially last week.  A top scenario replaces the short term outlook.
Current prediction

Short term:reverse head and shoulders points at 16,400. Now questionable.

Medium term:  none

Long term: none

27th February: The index made a new recent high on Friday with excellent volume, giving a good chance that we will see target of 16,200 in the next week or two. Many encouraging signals from blue chips as well.

20th February: Nothing conclusive. The small top in the first chart is too small to be helpful. Best hope would be that the index is about the rally based on the huge volume since the beginning of this year. A good indicator would be HSBC if it broke 132.
Current prediction

Short term:reverse head and shoulders points at 16,200

13th February: No clear indication from the index. But a failure of support for Cheung Kong gives a nasty mood to the market. Other stocks are doing well with new highs.
China stocks are mixed: China Mobile could be topping but other China stocks appear to be bottoming.

Current prediction

Short term:reverse head and shoulders points at 16,200

Medium term:  none

Long term: none

6th February: The market continues to tease us with no substantial progress since the middle of last year. The little top in the first chart is a minor concern. The failure of Cheung Kong and Hutchison to break medium term resistances reflects lack of buying interest in the market. The medium pattern for HSBC is a little more encouraging. The ETF fund chart shows the market clinging to support just below a long term resistance akin to that of Hutch and Cheung Kong. Something must give soon. But the market moves at its own unhurried pace.
Current prediction

Short term:reverse head and shoulders points at 16,200

Medium term:  none

Long term: none

30th January: Overall bullish signals from the index. But there are some major resistances to be overcome: the index in the third and fourth charts; the ETF and some blue chips are all knocking at the door of strong resistances.
Current prediction

Short term:reverse head and shoulders points at 16,200

23rd January: All indications suggest that this market is bullish, even though we have only a short term target of 16,200. Market turnover is consistently high and should support a rising market. There are many bullish stock charts and scenarios.  Pattern of the week goes to Harry, for his suggestion of New World China, below.
Current prediction

Short term:reverse head and shoulders points at 16,200

Medium term:  none

Long term: none

9th January: The index has broken a key long term resistance at 15,500 on good volume. No targets, but the trend is clearly up.



2005

24th December: Next test at the 15,400 level. Cheung Kong and Hutch are still holding nicely.

19th December: Another week of nothing happening. Cheung Kong and Hutchison, two important blue chips, are holding on to support well. While these two stocks remain well supported, I remain bullish.
Current prediction

Short term: short term reverse head and shoulders points to 15,100

Medium term:  none

Long term: none

12th December: A short term bearish scenario in the first chart. But bullish hope may be gleaned from the ETF chart and from Cheung Kong and Hutchison, which are still looking like they waiting to rally.
Current prediction

Short term: short term reverse head and shoulders points to 15,100

Medium term:  none

Long term: none

5th December: Waiting for a breakout from 15,500 or thereabouts. New World made an interesting breakout last week. Otherwise, nothing exciting.

Current prediction

Short term: short term reverse head and shoulders points to 15,100

Medium term:  none

Long term: none

28th November: The index is looking bullish. However, a close at a new recent high of around 15,500, or a little higher, would give greater cause for confidence. Both Cheung Kong and Hutchison are looking bullish.

Current prediction

Short term: short term reverse head and shoulders points to 15,100

Medium term:  none

Long term: none

28th November: The index is looking bullish. However, a close at a new recent high of around 15,500, or a little higher, would give greater cause for confidence. Both Cheung Kong and Hutchison are looking bullish.

Current prediction

Short term: short term reverse head and shoulders points to 15,100

Medium term:  none

Long term: none

21st November: The index rallied last week towards the target of our short term target of 15,100. A better indicator of reversal would be if Cheung Kong breaks out from resistance at the current level and rallies to 81 or 82 on strong volume. Let's see what happens this week.

Current prediction

Short term: short term reverse head and shoulders points to 15,100

Medium term:  none

Long term: none

14th November:  The index is starting to look more bullish. But a new recent high of around 15,700 would improve the picture.

Current prediction

Short term: short term reverse head and shoulders points to 15,100

7th November:  The index rebounded on long term support. There's still a bearish danger. But the odds seem to be tipping back in favour of the bull. Keep an eye on the Morgan Stanly ETF chart. A breakout from 13.5 could be the start of a new rally.

Current prediction

Short term: double top points to 14,000 done log target

Medium term:  none

Long term: none

31st October: The index and many stocks have broken good supports, suggesting that the market has entered a bearish phase for the medium term at least. The only hope for a swift rebound would be a rally on the current support in the second chart. But the analogous long term weekly chart shows the same support broken. The weekly is usually a leading indicator. Thus we are more likely to see the index go down, rather than up. Let's see another week.

Current prediction

Short term: double top points to 14,000

Medium term:  none

Long term: none

17th October: The index has made a small double top. But the index is well supported in the daily, weekly, fund, and ETF chart. Let's see if the supports hold. In particular, look out for the weekly close next Friday. A close at 14,400 or lower would be bearish.

Current prediction

Short term: double top points to 14,000

Medium term:  none

Long term: none

10th October: The index looks dangerously toppy, but the important support is at around 14,500. There is a little double top on the long term weekly chart. Danger looms.

26th September:  Nothing much going on with the market at the moment. We need a rally to around 15,600 on strong volume in order to be confident that the bull will continue.

19th September: Some signs of topping for the index and blue chips. I would be surprised if the market fell more than a few percent, given the bullish patterns for Cheung Kong and Hutchison, as well as other large cap stocks.

12th September: Nothing exciting last week. Bullish prospects are still good, as the second chart suggests.

5th September: Cancellation of the short term pattern in the first chart affirms the strength of the current bull trend.

29th August: The index could be in pullback mode and might fall as far a 14,500. But there Cheung Kong and Hutchison still look very strong, even if they come off a bit.

22nd August: The bull is taking a bit of a rest. But the medium term looks promising. Cheung Kong and Hutchison both have excellent charts. See site visitors' stock picks below.

8th August: The index has reached our target of 15,000. No more targets. But the volume for the market looks sufficient to propel the index to 17,000, within a few months.

Current prediction

Short term: none

Medium term:  Triangle points to 15,000 - done

Long term: none

1st August: The index is edging up nicely to our first target of 15,000. Wharf has broken long term resistance, which, with luck, will lead other blue chips to break similar resistances.

Current prediction

Short term: none

Medium term:  Triangle points to 15,000.

25th July: The rally to 15,000, as shown by our triangle in the first chart, is proceeding nicely. Volume is excellent. Good chance of reaching target. Thereafter, a good chance at 17,000, if volume continues.

Current prediction

Short term: none

Medium term:  Triangle points to 15,000.

20th July: A significant breakout on the long term daily and weekly charts gives hope that the index will rally at least to 16,500 in the medium term (several months). Volume is sufficient to inspire hope that long term resistance, at around 20,000, will be tested within a year or two

27th June:  The index is getting close to resistance at 14,500. The fund chart might be a leader. Breakout from the triangle in the first chart is encouraging. But the longer term resistance at 14,500 is more important.

20th June: The fund chart is still the most persuasive signal, turning on neckline support of a bottom. Although it is too early to tell, the chance of a 20 to 30% upside by the end of the year looks promising. A clear signal for the index would be a breakout above the resistance at around 14,500.

6th June: What a sleepy few weeks it has been. The index is still trapped between the support and resistance in the second chart. The index has been meandering in that little space for several months now. The first chart shows the same little space more graphically. Something must give soon. But  I would not be surprised if the index remains stuck in the current sand pit for another few weeks.

Current prediction

Short term: none

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,500 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,500 would help.

21st May: The index is now testing support in the second chart. The weekly chart shows a similar support broken. Many stocks are looking bearish. This market is looking dangerous and will remain so unless we see a close above the resistance at around 14,400.

Current prediction

Short term: none

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,500 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,500 would help.

16th May: Mixed signals: The first chart and that of HSBC are decidedly bearish. The fund chart and Cheung Kong look promising. More time needed to resolve the direction.

Current prediction

Short term: none

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,500 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,500 would help.

25th April: The situation is much the same as last week: the index is sitting near good support, the fund chart is still bullish, but HSBC and other blue chips are decided bearish in the medium term. With luck, the situation will resolve itself in a few weeks.

Current prediction

Short term: short term top pointing to 13,100

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,500 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,500 would help.

18th April:  A fall below 13,200 would likely see a fall to the 12,400 region. HSBC has a bearish prediction that could see the market fall below 13,200.

Current prediction

Short term: short term top pointing to 13,100

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,500 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,500 would help.

11th April: The index has rallied to short term resistance at around 13,700.  A double top danger exists. If the index falls below 13,300, there is a fair chance that we will see 12,400, or thereabouts. But there is excellent support at around 13,100 that might defeat the lower target, should it become confirmed. A rally above 13,700 would be bullish. A fall below 13,100 would be grim. See the blue chip charts, some of which have cancelled, or almost cancelled, bearish tops.

Current prediction

Short term: short term top pointing to 13,100

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,500 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,500 would help.

4th April: Quite a bit of weakness in the market with a short term top pointing to 13,100 and a clear double top in HSBC pointing down about 20%. On the other hand, the fund chart is still well supported, and there is good double support at 13,100, shown in the second chart below. So there is hope that recent weakness could soon reverse.

Current prediction

Short term: short term top pointing to 13,100

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,500 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,500 would help.

21st March: Nothing clear from the index. But many blue chips appear to be topping. Fund gives the only hope for the medium term.

Current prediction

Short term: none

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,500 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,500 would help.

14th March: Not much change for the index. But many blue chip stocks are showing signs of topping, or getting close to long term resistance. Among these are #2, #3 #4, #6, 12, 14, 16 and 20. Hutchison, #13, has already made a medium term top. These resistances suggest danger for the market. A fall to 13,200 would suggest a medium downturn. On the other hand, the fund chart still looks very encouraging. So we are left with the familiar taste of uncertainty.

Current prediction

Short term: none

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,500 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,500 would help.

8th March: The index is still in the grip of a short term top pointing down to 13,500. Some blue chips are looking a bit dangerous. If the index falls to around 13,400, chances are there won't be much action in the market till May. But the fund chart still looks promising and may indicate support at the current level.

Current prediction

Short term: double top points to 13,550

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,500 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,500 would help.

21st February: Waiting for a close above 14,500 for a breakout in the third chart and 14,600 for a breakout in the second chart. After that we could see some excitement.

Current prediction

Short term: none

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,500 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,500 would help.

14th February: The market needs a close at around 14,600 to be confident of the next phase of the bull market.

Current prediction

Short term: double top points to 13,200 - now questionable

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,000 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,000 would help.

31st January: Waiting for the index to find a bottom. There are no clear signals for the short or medium term. But the long term looks decidedly bullish. Pay attention, in particular, to the third chart, which suggests that the index is preparing for a major rally.

Current prediction

Short term: double top points to 13,200

Medium term:  reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,000 resistance

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,000 would help.

17th January: Good indication from the long term fund chart that the market is about to turn, after a couple of weeks in decline.

Current prediction

Short term: reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,000 resistance

Medium term: none

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,000 would help.

10th January: The index is showing signs of short term weakness. But blue chips such as Cheung Kong and Hutchison look strong.

Current prediction

Short term: reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,000 resistance

Medium term: none

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,000 would help.



2004
20th December: The index is hesitating around the 14,000 level. But the fund chart appears to be leading the index chart and should be taken as a signal that the index will soon breakout upside.

Current prediction

Short term: reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,000 resistance

Medium term: none

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,000 would help.

13th December: The index has turned on a medium term resistance. There is support at 13,400.

Current prediction

Short term: reverse head and shoulders points to 15,500 - confirmed if index breaks the 14,000 resistance

Medium term: none

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,000 would help.

6th December: Both the weekly and the daily charts have broken out of long term patterns that give tentative targets around 20,000. Several blue and red chips are testing necklines of long term reversal patterns. Although there are several obstacles, chances of seeing 20,000 next year appear good.

Current prediction

Short term: reverse head and shoulders points to 15,500 - confirmed if index break 14,000 resistance

Medium term: none

Long term: weekly and daily reverse head and shoulders pointing to around 20,000 - not good patterns but volume is persuasive. Confirmation of the neckline at 14,000 would help.

20th November: The index is approaching a major resistance the breakout from which on good volume would signal a new wave of bullishness.

Current prediction

Short term: reverse head and shoulders points to 15,500 - confirmed if index break 14,000 resistance

Medium term: none

Long term: none

15th November: The big test is at 14,000. Strong resistance and the neckline to our long term scenario are at 14,000. History suggests that the index is making a large, albeit distorted reverse head and shoulders pattern. The fund chart has already broken out of a similar pattern, suggesting that the index may soon follow. If all goes well, we should see 20,000 in the next 12 months. Hutch and New World look good.

Current prediction

Short term: reverse head and shoulders points to 15,500 - confirmed if index break 14,000 resistance

Medium term: none

Long term: none

25th October: Still some short term top scenarios for the index and various stocks. Resistance is shown on the fund chart. The only bullish indicator would be the previous reverse head and shoulders patterns for the index and the fund chart, which suggest that the index is still in bullish mode. As usual, we will have to exercise a little patience.

Current prediction

Short term: none

Medium term: none

Long term: double bottom (weekly) pointing to 15,000 - questionable

18th October: Nothing persuasively bearish in sight. But keep an eye out for falling volume followed by a close below 12,900 anytime in the next two or three weeks. Such a close would suggest a fall back to 12,400, at least.

Current prediction

Short term: none

Medium term: none

Long term: double bottom (weekly) pointing to 15,000 - doubtful

11th October: No clear indication of direction. The index could be making a short term top, or merely pausing before an attempt at 14,000. Time will tell.

4th October: Nice breakout from the long term fund chart. But most of the individual stocks require more volume to make persuasive bottoms. Next big test at 14,000.

Current prediction

Short term: none

Medium term: none

Long term: double bottom (weekly) pointing to 15,000 - doubtful

20th September: The index is likely to retest the resistance at 14,000. If this resistance breaks on good volume, the next strong resistance would be at around 16,300.

Current prediction

Short term: none

Medium term: none

Long term: double bottom (weekly) pointing to 15,000 - doubtful

4th September: The index turned on a medium term resistance. But the resistance is not strong. Quite likely that we will soon see the resistance at 14,000 tested.

Current prediction

Short term: none

Medium term: none

Long term: double bottom (weekly) pointing to 15,000 - doubtful

30th August: Encouraging volume and breakout from resistance at around 12,500 last week. There is a possible medium term reversal scenario in the first chart and a long term reversal scenario, albeit of poor proportions, in the second. The weekly chart still shows a persuasive double bottom, which may serve as an indication of long term trend reversal, even though the target for the pattern is dubious. Next strong resistance is at around 14,000; slightly lower on the weekly chart.

Current prediction

Short term: none

Medium term: none

Long term: double bottom (weekly) pointing to 15,000 - doubtful

23rd August: Our short term triangle is cancelled. We now have no clear long term predictions. We are merely left with the prevailing long term trend being bullish. No clear direction for the medium term. Take a look at the Asian regional fund chart for a little encuoragement.

Current prediction

Short term: symmetrical triangle pointing to 13,000  - cancelled

Medium term: none

Long term: double bottom (weekly) pointing to 15,000 - doubtful

26th June: A short term triangle points to 13,000. It's a nice little pattern and there is nothing on the longer term charts to negate it. But triangles are not the most reliable pattern and especially in Hongkong. On the other hand, some blue chips are making nice patterns. Cheung Kong, for example, could be completing a long term reversal pattern. Volume and proportions for the pattern are all good. So lets keep our fingers crossed.

Current prediction

Short term: symmetrical triangle pointing to 13,000

Medium term: none

Long term: double bottom (weekly) pointing to 15,000 - doubtful

12th June: Nothing very exciting occurred during the last couple of weeks.

28th June: No clear direction: a possible top in the short term, some interesting scenarios for the index and various blue chips. A close at 11,700 would trigger a fall to 11,100. But that just as easily might not happen.

Current prediction

Short term: none

Medium term: none

Long term: double bottom (weekly) pointing to 15,000 - doubtful

31st May: A short term island reversal suggests further upside in the short term. But there is no clear sign that the index has reversed its several months of decline.

Current prediction

Short term: none

Medium term: none

Long term: double bottom (weekly) ponting to 15,000 - doubtful

10th May: The index failed support at 12,000. Weekly support is at 11,600. There is no other good support, nor is there any bearish target. It's now a matter of waiting and seeing where the dust settles.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - cancelled
                    2. double bottom (daily - blue pattern) pointing to 16,500 - cancelled
                    2. double bottom (weekly) ponting to 15,000 - doubtful

3rd May: The index is testing support at 12,000. Target of the short term double top has been reached. If 12,000 fails, 11,000 will be the next support. Target 15,900 is valid, but questionable due to the pullback to the neckline after reaching more than half of target. Hongkong Bank has a valid target of 109 - a fall of another 4 or 5%. The Hongkong fund also has another few per cent to fall before reaching target. But the most important support is that at 12,000, shown in the third chart.

Current prediction

Short term: double top points to 11,800

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                    2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                    2. double bottom (weekly) ponting to 15,000 - confirmed

26th April: The index still has hope for a support at the 12,000 level. But the fund has broken a top and a good long term support.

Current prediction

Short term: double top points to 11,800

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                    2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                    2. double bottom (weekly) ponting to 15,000 - confirmed

19th April: Last week's cancellation of double top failed, and the top is reinstated. But I would pay greatest attention to the support at 12,000 on the index and the fund chart, which is sitting on the neckline of a dangerous top.

Current prediction

Short term: double top points to 11,800

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                    2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                    2. double bottom (weekly) ponting to 15,000 - confirmed

12th April: The index is still subject to the short term top pointing to 11,800. However, a rally of only a hundred points or more will cancel the top and give support to the long term patterns pointing to 15,000 and above. HSBC is still subject to a little top. But other blue chips and red chips look strong.

Current prediction

Short term: double top points to 11,800

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                    2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                    2. double bottom (weekly) ponting to 15,000 - confirmed

5th April: A short term top for the index and several blue chips could see the index fall further. Danger of cancellation of the 15,000 target. But the critical support is at 12,000. Only fall below this level will imperil the the target of 15,000.

Current prediction

Short term: double top poimts to 11,800

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                    2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                    2. double bottom (weekly) ponting to 15,000 - confirmed

15th March: Considerable uncertainty for the market. The weekly chart suggests that the index has at least a little further to fall. Many blue chips are sitting on the neckline support of double tops. A little nudge could see a lot further downside. On the other hand, the index has two excellent patterns pointing to 15,000 and beyond. One would be cancelled if the index falls below 12,600. But the greater probability favours the targets. Let's be patient - and put faith in the excellent long term patterns.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                    2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                    2. double bottom (weekly) ponting to 15,000 - confirmed

8th March: The index is still strong as are many blue chips. Channel support is being tested in the first chart. We should see the index rally on support. If it fails, there is the double top to consider from the first chart.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                    2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                    2. double bottom (weekly) ponting to 15,000 - confirmed

1st March: The index is still strongly bullish and target of 15,000 looks like a strong probability.

23rd February: A very clear signal points to 15,000 for the index. Both the daily and weekly charts are highly persuasive.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                    2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                   2. double bottom (weekly) ponting to 15,000 - confirmed

16th February: The market is still looking unequivocally bullish. Next breakout would be a close higher than the previous recent high at 13,800. After that, 15,000

9th February: The index has encountered a bit of resistance, but it should only be temporary. The bigger obstacle is at 15,000.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                    2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                    2. double bottom (weekly) ponting to 15,000 - confirmed

26th January: Market moving strongly to targets. Blue and Red chips looking good.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                    2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                    2. double bottom (weekly) ponting to 15,000 - confirmed

19th January: Resistance on the weekly chart gives cause for a possible period of consolidation. Long term targets, as high as 16,500, are still a high probability.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                   2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                    2. double bottom (weekly) ponting to 15,000 - confirmed

12th January: All signals are bullish.Volume for the market is excellent. Confirmed targets point to 15,000, then around 16,500. All blue chips are looking strong.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily- grey pattern) pointing to 15,000 - confirmed
                    2. double bottom (daily - blue pattern) pointing to 16,500 - confirmed
                    2. double bottom (weekly) ponting to 15,000 - confirmed 



2003

29th December: The index is trapped under a strong resistance. But volume is encouraging. I would expect that, soon into the new year, the index will give an impressive burst.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily) pointing to 15,000 - confirmed if the index closes above 12,600
                    2. double bottom (weekly) ponting to 15,000 - confirmed

1st December: There is still a short term topping danger. However, the weekly chart is unambiguously bullish. A few blue and red chips have turned on neckline supports, tending to suggest that their bullish targets are valid and that the short term falling trend is finished.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily) pointing to 15,000 - confirmed if the index closes above 12,600
                    2. double bottom (weekly) ponting to 15,000 - confirmed

24th November: Unless the index turns and rallies sharply this week, we can expect a further downside for the index of around 8 - 10%. Take a look at Cheung Kong and Hutch. These two stocks are retesting the necklines of their bottom patterns. If they fail, the index is most likely going to follow. The index looks dangerous. The weekly chart, on the other hand, shows nothing dangerous. Next week should give a clearer indication.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily) pointing to 15,000 - confirmed if the index closes above 12,600
                    2. double bottom (weekly) ponting to 15,000 - confirmed

17th November: The week opened up with a little gap. But otherwise, no significant movement from the previous week. A close above 12,600, then above 13,000 would be the next bullish signals. Long term predictions of 15,000 still look good.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily) pointing to 15,000 - confirmed if the index closes above 12,600
                    2. double bottom (weekly) ponting to 15,000 - confirmed

10th November: A few strong resistances are keeping the index down. But the medium to long term trend is still clearly bullish and the prospect of 15,000 within a few months is strong.

Current prediction

Short term: none

Medium term: none

Long term: 1. double bottom (daily) pointing to 15,000 - confirmed if the index closes above 12,600
                    2. double bottom (weekly) ponting to 15,000 - confirmed

3rd November: Possible fall back to the 10,800 - 11,000 region. However, the weekly chart appears to have confirmed the double bottom prediction of 15,000. History is against the prediction. The index usually reverses on reverse head and shoulders patterns, not double bottoms. A close above 13,000 would confirm the controversy in favour of the double bottom.

Current prediction

Short term: none

Medium term: none

Long term: double bottom (weekly) points to 15,000 - confirmed

27th October: The market turned sharply at the resistance at 12,300 last week. (Actually 3 points shy.) We could see a few months of consolidation as the market makes a right shoulder for a reverse head and shoulders pattern (see first chart). Otherwise, we could see a swift recovery and breakout from the double bottom in the first chart.

Hongkong is not usually a double bottom market. Reversals usually occur by way of head and shoulders patterns. If the market keeps falling next week, and closes below, say, 11,000, we could assume that a right shoulder is forming, according to historical precedent. On the other hand, the market has been ascending at a very swift pace on strong volume. I would not be surprised if it keeps going.

Current prediction

Short term: none

Medium term: none

Long term: double bottom (weekly) points to 15,000 - not yet confirmed

20th October: Target of 12,100 was reached last week. But the bull market might have only just begun, as the index now approaches a big double bottom. Breakout from this bottom would be at around 12,300. Target would be 15,000. Excellent volume on the recent rally suggests a spectacular rally to 15,000, in the event of breakout on high volume.

Current prediction

Short term: none

Medium term: double bottom pointing to 12,100 - done

Long term: double bottom (weekly) points to 15,000 - not yet confirmed

13th October: The index is almost at medium term target. There is a long term resistance at the current level that could interrupt the advance of the index. But that would only be temporary. The stage is set for a double bottom to break out and take the index to 15,000. The weekly chart has already broken out of a similar pattern. Chances are therefore good for the daily chart, and the index. Blue chips and China Mobile look excellent.

Current prediction

Short term: none

Medium term: double bottom pointing to 12,100

Long term: double bootom (weekly) points to 15,000 - not yet confirmed

6th October: A very bullish market. We should soon see the 12,000 mark tested. Most blue chips are enjoying strong gains. More should come. The long term chart suggests that the current bull trend may only be just beginning.

Current prediction

Short term: none

Medium term: double bottom pointing to 12,100

22nd September: The market is still on track for 12,000. But there should be strong resistance at that level.

Current prediction

Short term: none

Medium term: double bottom pointing to 12,100

15th September: The index fell with a gap last week. That is a bearish sign. But it is short term. The medium and long term prospects for the index are sufficiently well indicated to inspire confidence.

Current prediction

Short term: none

Medium term: double bottom pointing to 11,900

8th September: The index rallied on increasing volume, indicating a sustainable rally. 11,900 is a high probability. At that point we may see a consolidation at around 12,000. The weekly chart shows resistance slightly lower than 12,000. Let's see what happens at that point.

Current prediction

Short term: none

Medium term: double bottom pointing to 11,900

1st September: Both the index and many blue chips are showing good bottom patterns with excellent volume. Chances of seeing the index reach target at 11,900 and test resistance at 12,000 are very good.

Current prediction

Short term: none

Medium term: double bottom pointing to 11,900

Long term: none

18th August: .Target of 11,850 is now highly probable after a breakout from a medium term bottom with excellent volume. Many blue chips look promising.

Current prediction

Short term: none

Medium term: double bottom pointing to 11,900

11th August: The bottom pointing to 11,800 that broke out last week, failed this week.  We have a nice scenario building, and good volume, giving cause for hope. But there is not yet any clear bullish signal.

Current prediction

Short term: none

Medium term: double bottom pointing to 11,800 - on hold

4th August: The index has broken out of a bottom but without persuasive volume. If average daily turnover for the market picks up to around HKI$15 billion, the index will have a very good chance of reaching target of 11,800 in the next couple of months. Many stocks are making persuasive reversals. A few are shown below.

Current prediction

Short term: none

Medium term: double bottom pointing to 11,800 - not yet confirmed

28th July: Waiting for the index to break a long term reversal pattern in the first chart. Volume supports the pattern such that if it breaks, it will have a good chance of supporting a rally to 11,700 at least, and probably 12,000. The index needs to close at 10,300 first. Some possible short term double tops in some blue chips.

21st July: An excellent pattern is brewing for the medium term. (See the first chart). A close at, say, 10,300 on strong volume of at least HK$15 billion would give a very good chance of the index testing resistance at around 12,000. We need to see the pattern breakout first.

5th July: A nice pattern is developing. It would require a close at 10,200, or better, 10,300 in order to confirm a target of 11,700.

30th June: The index is now approaching the neckline of a double bottom scenario at around 10,300 or 10,400. If the index breaks this level on strong volume, we may assume that the bull will continue at least until around 10,500.

16th June: Good volume gives hope that the index will rally further. Next resistance is at around 10,000; then 11,500 to 12,000.

9th June: Increasing volume for the index and breakout from a bottom in the fund are good evidence that the current rally is sustainable. Many blue chips are also looking bullish.

2nd June: The index has reached our first target. Now we have to wait and see whether a new pattern will form and break. In the meantime, volume is still encouraging. Thus we have cause to presume that the short term bullish trend will continue.

Current prediction

Short term: double bottom points to 9,600 - done

Medium term: head and shoulders top points to 8,367 (log)-done , 8,273 (arithmetic)

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - cancelled

26th May: Strong indication that the market is bottoming:

Current prediction

Short term: double bottom points to 9,600

Medium term: head and shoulders top points to 8,367 (log)-done , 8,273 (arithmetic)

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

19th May: Good volume last week and the week before for the index and blue chips give hope that the index has bottomed. Resistance at 9,200 is strong. But the volume gives cause for hope.

12th May: A nice short term double bottom, good volume on the medium term chart, and a possible turn on long term support all auger well for a bottom in the Hang Seng. Blue chips also inspire hope that market has bottomed.

Current prediction

Short term: none

Medium term: head and shoulders top points to 8,367 (log)-done , 8,273 (arithmetic)

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

28th April: The outlook is still bearish. The log target of our medium term pattern was reached last week. But there are still no good supports on the long term charts, with the exception of the fund chart. See the long term supports below at around 7,600, 7,000 and 6,500.

Current prediction

Short term: none

Medium term: head and shoulders top points to 8,367 (log)-done , 8,273 (arithmetic)

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

18th April: The index broke a major support at 8,800. Next support could be as low as 7,800, 7,000 or even 6,000. Let us hope for a miracle to bring the index up with the rest of the region. The only good news is in the fund chart, which still has long term support unbroken.

29th March: The long term support at around 8,800 in the third chart is still the most significant indicator of trend. If it breaks, we can expect further falls, perhaps to the 6,000 range. On the other hand, we could see a bottom form, as shown in the second chart.

Current prediction

Short term: none

Medium term: head and shoulders top points to 8,367 (log), 8,273 (arithmetic)

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

24th March: The bearish target of 8,300 is not yet cancelled. But there is cause for hope that the index might be bottoming

Current prediction

Short term: none

Medium term: head and shoulders top points to 8,367 (log), 8,273 (arithmetic)

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

17th March: The index has an outstanding medium term target of around 8,300. But long term support at the current level (around 8,800) is very strong. We shall have to wait and see which prevails.

Current prediction

Short term: none

Medium term: head and shoulders top points to 8,367 (log), 8,273 (arithmetic)

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious

10th March: Clearly bearish signals from the index and blue chips. Target of 8,300 is valid. But there is a good long term support at around 8,800 that could interrupt the fall. If the support at 8,800 fails, the downside is 6,000.

Current prediction

Short term: none

Medium term: head and shoulders top points to 8,367 (log), 8,273 (arithmetic)

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

3rd March: No change from last week. We are still waiting for something decisive. The index is squashed into the corner of long term resistance and long term support. One will have to break soon. I guess that when it does, we will see some action. In the meantime, wait and see.

Current prediction

Short term: none

Medium term: none

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

24th February: Medium term top or bottom at long term support? These are the two possibilities for the Hang Seng Index. The index would have to fall to around 8,600 before we could dismiss the effect of long term supports. On the other hand, there is no persuasive bottom pattern yet. In either case, we shall have to wait for something persuasive.

10th February: The index has broke out of a top pointing to 8,360, or thereabouts (now cancelled). The breakout is not yet persuasive. But the patterns of one or two blue chips suggest that the market is likely to fall further. However, there is good long term support at the current level (around 9,100) and below that, there is support at 8,800. We should keep an eye on these supports for signs of interruption.

Current prediction

Short term: none

Medium term: head and shoulders top points to 8,367 (log), 8,273 (arithmetic)

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

3rd February: If the index falls another hundred points or so this week, we can expect a fall to at least 8,500. However, the index, the fund and many blue chips are hugging good support. Let's see if they hold and a bottom forms or whether they break and the index sinks.

Current prediction

Short term: none

Medium term: none

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

27th January: The index and many blue chips are looking decidedly weak (with one possible exception). The index is sitting on a good support at last Friday's close. If the support breaks and if the index falls to about 9,100, we are likely to see the index retest recent lows. Long term support is at 9,000. If this support breaks, there is one at 8,800. But after that, 6,500.

13th January: Possible bottoming for the index as it is now resting on good support. But more volume would be required for a bottoming scenario. Possible bottom for china fund. But bearish indicator for China Mobile.

Current prediction

Short term: none

Medium term: none

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious. 



2002

23rd December: Bearish indicators could see the index fall below 9,000, even after another attempt at the 10,000 level. On the other hand, the index is on a good channel support. If the index closes below 9,400 this week or next, the support will be broken.

Current prediction

Short term: none

Medium term: none

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

16th December: The index broken out of a rising wedge that suggests a fall back to the previous low of 8,700. Many blue chips confirm this impending fall.

Current prediction

Short term: reverse head and shoulders points to 11,000 - cancelled

Medium term: none

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

9th December: The index looks fairly strong, but several blue chips look weak. A short term bottom points to 11,000, but it is likely to be subordinated to a developing larger pattern. Outlook is still rather misty.

Current prediction

Short term: reverse head and shoulders points to 11,000 - confirm if index closes above 10,260 resistance

Medium term: none

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

2nd December: Still waiting for something positively bullish to occur, such as several days of volume in excess of HK$10billion per day. Resistance at around 10,200 to 10,300.

18th November: A short term bottom leading to a medium term bottom and good long term term support give cause for hope that the index is bottoming. Some blue chips look encouraging.

Current prediction

Short term: none

Medium term: none

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubiou

11th November: The index is making a short term bottom pattern. But volume is not persuasive. This is a market that rarely makes double bottoms (usually lopsided reverse head and shoulders - "v" bottoms). Perhaps another week will make the short term picture clearer.

2nd November: Nothing clear. The index might be about to retest support at 8,800. But it's anyone's guess. The blip of volume a few weeks ago was encouraging, but the general volume picture over the last few months was weak. This does not suggest an impending rally.

Current prediction

Short term: none

Medium term: none

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

28th October: The index has touched and turned on a good long term support. But there is no evidence yet of a bottom.

Current prediction

Short term: none

Medium term: none

Long term: head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.

19th October: Good long term supports and fair volume last week give hope for a bottom around the current level. Further evidence of a bottom would be required

12th October: Good supports on the long term daily and the fund charts. But no sign of a bottom yet.

Current prediction

Short term: none

Medium term: double top points to 8,990 (log), arithmetic 8,780 - done

Long term: 1.) head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.
                     2.) double top (weekly) points to 9,000-done

7th October: The index is sitting on a possible support. The fund chart shows very good long term support, giving hope for a bottom soon. But stocks such as HSBC and Cheung Kong give a clear indication of falling further. Downside for the index is a new low of 6,000.

Current prediction

Short term: none

Medium term: double top points to 8,980 (log), arithmetic 8,765

Long term: 1.) head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.
                    2.) double top (weekly) points to 9,000

30th September: The index is sitting on a good long term support. There is a chance of a bottom at the current level, although no such indication yet.  There are supports for some blue chips. But HSBC has broken a top. If the stock falls below 80, it is quite likely the index, will fall much further.

Current prediction

Short term: none

Medium term: double top points to 8,980 (log), arithmetic 8,765

Long term: 1.) head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.
                    2.) double top (weekly) points to 9,000.

23rd September: One or two good long term supports on the daily chart give hope for a bottom. But no support yet on the weekly charts. Stocks also look like they have further to fall, suggesting that the daily supports for the index will break. Not looking hopeful.

Current prediction

Short term: none

Medium term: double top points to 8,980 (log), arithmetic 8,765

Long term: 1.) head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.
                    2.) double top (weekly) points to 9,000.

16th September: The index fell through a couple of supports, suggesting a fall to 8,800. But the major long term daily support at 9,500 still needs to be broken before we can feel confident of 8,800.

Current prediction

Short term: none

Medium term: double top points to 8,980 (log), arithmetic 8,765

Long term: 1.) head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.
                    2.) double top (weekly) points to 9,000.

9th September: The index is supported at the current level. Priority is with the long term daily chart, showing support at 9,500. If this support breaks, we can consider the other charts.

Current prediction

Short term: none

Medium term: double top points to 8,980 (log), arithmetic 8,765

Long term: 1.) head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.
                    2.) double top (weekly) points to 9,000.
2nd September: A prediction of 8,700 to 8,900 could take effect if the index falls below 9,600. But there is a chance of an interruption at 9,400.

Current prediction

Short term: none

Medium term: double top points to 8,980 (log), arithmetic 8,765 - still valid

Long term: 1.) head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.
                    2.) double top (weekly) points to 9,000

26th August: A short term double bottom is more likely a pullback to a bearish double top. Bearishness is the more likely trend in the near term.

Current prediction

Short term: none

Medium term: double top points to 8,980 (log), arithmetic 8,765 - still valid

Long term: 1.) head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.
                    2.) double top (weekly) points to 9,000.

19th August: A close above 10,300 would be bullish for the index if volume were to pick up. At present, volume is too low to consider a bottom. The market could take until the end of the year to bottom.

Current prediction

Short term: none

Medium term: double top points to 8,980 (log), arithmetic 8,765

Long term: 1.) head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.
                    2.) double top (weekly) points to 9,000.

12th August: The index is now testing a good long term support. If the support breaks, the next support would be at around 8,800.

Current prediction

Short term: none

Medium term: double top points to 8,980 (log), arithmetic 8,765

Long term: 1.) head and shoulders top (daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.
                    2.) double top (weekly) points to 9,000.

22nd July: A fairly compelling weekly chart suggests that the index is likely to fall back to September 2001 lows of around 8,600 or 8,700. No good support on the daily chart at that level. We might just be in for a fall to 7,700. Need to take a closer look in a month or two.

Current prediction

Short term: none

Medium term:  none

Long term: 1.) head and shoulders top(daily chart) points to 7,980 (log) and 5,870 (arithmetic) - dubious.
                    2.) double top (weekly) points to 9,000.

8th July: No clear direction for the index. There is a dubious top that points to around 8,000. But I wouldn't bet on it, given the bullish regional trend.

Current prediction

Short term: none

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

1st July: The index is on a short term support. If it fails, long term support at around 9,500 or 9,600 would likely be tested.

Current prediction

Short term: none

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

24th June: The index is on a fair long term support. But if it falls further, the next support would be at around 9,500. Some blue chips have further to fall before they reach support (Cheung Kong and HSBC). But China Mobile is sitting on long term support and could easily bottom soon.

10th June: The index had a rather lazy week last week. But the fund has broken out of a pattern analogous to that of the index, perhaps suggesting that the market is in bull mode. The big resistance at 12,000 is still the big resistance.

Current prediction

Short term: none

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

3rd June: Things are looking pretty bearish for the market, at least in the short term. One exception: Cheung Kong, which could possibly be reversing. The index has good support at 11,100. Let's see if it holds and turns or fails.

Current prediction

Short term: double bottom points to 12,450 - cancelled

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

27th May: The index is facing a major obstacle at 12,000. Short term weakness is starting to appear, endangering the double bottom target of 12,450. I have dismissed the long term daily target of 7,980. But the analogous top on the weekly chart looks more threatening. Blue chips are mixed, with Hutchison looking  weak.

Current prediction

Short term: double bottom points to 12,450

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

13th May: The market is looking more and more bullish. Last week saw good volume for the third week. Resistance at 12,000 is now the big issue. Concerns over the US markets again weigh.

Current prediction

Short term: double bottom points to 12,450

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

6th May: Volume was encouraging last week. The index could soon give us a prediction of 15,000. Blue chips such as Cheung Kong and Wheelock are looking good too. Short term cloud would be weakness in the U.S.

Current prediction

Short term: double bottom points to 12,350

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

28th April: One or two positive signs that suggest that the Hongkong market might be coming out of hibernation. But the short term bearish prospects in the US markets is likely to cast a shadow .

Current prediction

Short term: none

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

21st April: The index has had some good recent volume. But it is not making any persuasive patterns. Cheung Kong is the stock to watch. It is starting to look unambiguously bullish.

Current prediction

Short term: falling wedge points to 11,900

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

8th April: Nothing exciting happening in the market. The index is on a medium term support. I would expect that we will see it rally to 12,000 again in the short term. But a fall through the current support could change that.

31st March: Nothing much to go on with the index. The fund is marginally bullish in the short term. Some blue chips are mildly encouraging. The real test would be at around 12,000 to 12,500, should the index decide to visit that level.

Current prediction

Short term: 1. falling wedge points to 11,900
                    2. double bottom points to 11,800-cancelled

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

9th March: The index made a short term bottom after breaking out of a wedge. Good chance of 11,800 or higher. But there is stiff resistance to be encountered at 12,000, or perhaps a bit lower. A close above 12,000, or perhaps 12,500,  would be bullish.

Current prediction

Short term: 1. falling wedge points to 11,900
                    2. double bottom points to 11,800

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

2nd March: Danger of a fall back to the previous recent low of around 8,900.

Current prediction

Short term: head and shoulders top points to 10,100

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

25th February: The index is not really going anywhere at the moment. The short term picture lacks direction, as does the medium term. Target of 10,100 is still valid. But time is running out for the prediction.

Current prediction

Short term: head and shoulders top points to 10,100

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

18th February: The index rebounded strongly, cancelling the target of 9,500 and giving a possible wedge target around the previous top of 11,800. Volume, however, was unimpressive. I would like to see heavier volume, say around HK$12 billion per day, or more, before getting hopeful about a sustained rally. On the other hand, rallies in Hongkong often commence on marginal volume. We might take some cheer from the regional rally to infer that the Hongkong market has reversed. But volume at the moment needs to pick up.

Current prediction

Short term: none

Medium term:  head and shoulders top points to 9,500-cancelled

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

11th February: The index is likely to fall to somewhere around 9,500, which is close to the long term support. Perhaps the index will bottom a little higher than the long term support, if the current bear turn is merely short term.

Current prediction

Short term: double top points to 10,200

Medium term:  head and shoulders top points to 9,500

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

2nd February: The target of 10,300 is still valid. But there is a possible resistance at the current level that could prevent the fall.

Current prediction

Short term: double top points to 10,300

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

28th January: A short term pattern points to 10,300. But there is no good support at that level. We could see the index retest long term support at around 9,500.

Current prediction

Short term: double top points to 10,300

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

6th January: The index is still trapped under major resistances. The short term pattern is in danger of lapsing. Individual stocks lack volume. There is nothing very encouraging yet for this market.

Current prediction

Short term:  double bottom pointing to 12,350

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious. 


2001

24th December: The index is taking too long for the short term predictionto be of much use. Resistance at around 12,000, on the long term daily chart, is the next major obstacle. If this breaks and volume picks up, we can expect the rally to continue. Some stocks have topped, notably a few red chips.

Current prediction

Short term:  double bottom pointing to 12,350

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

10th December: No clear reversal pattern yet. But those visitors to this site who have been following my analysis for several years will recall that Hongkong often reverses on dubious patterns. Volume frequently comes after breakout, and not during the formation of the reversal pattern. Some blue chips, such as Cheung Kong, habitually rise on low volume. In the circumstances, prospects for the Hang Seng Index having made a long term reversal are good. A bit more evidence would be helpful.

Resistances at the current level, and, on the weekly chart, at around 12,500.

Current prediction

Short term:  double bottom pointing to 12,350

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

24th November: The next test is the resistance at 11,700 and then 12,000.

Current prediction

Short term:  none

Medium term:  double bottom points to 12,100

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

19th November: The index has made a double bottom. It's not a good pattern. But in the years that I have followed the Hang Seng Index, there has never been a reversal evidenced by a good pattern. Volume is reasonably persuasive. Many blue chips have cancelled top patterns. Some large-cap stocks have made good bottoming patterns. The only question mark is HSBC. It is stuck under a strong resistance and is in danger of bringing the market down to previous lows.

Current prediction

Short term:  none

Medium term:  double bottom points to 12,100

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious.

12th November: A few bearish things were shrugged off during the past few weeks, giving a chance that the index is bottoming along long term support. Strictly, we should see some long term resistances break for stocks such as Cheung Kong and other blue chips. But there are encouraging bottoms for other stocks, such as New World and Sun Hung Kai. The major thing to watch this week is the medium resistance on the long term daily and weekly charts (shown in yellow). The same resistance is shown in the first chart below in pink. The resistance is at around 11,000. It will be encouraging if this breaks.

Current prediction

Short term:  none

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious, but not so dubious now.

22nd October: All blue and red chips are looking bearish. The recent rally was just a pullback to the necklines of topping patterns. Unless there is a sharp rally in the next week or two, we can expect that the market will retest recent lows. A short term double top in the index has yet to be confirmed. But if the index falls 50 points or more on Monday, the short term top will be confirmed. Weakness in the US markets, expected this week, would no doubt assist the index to fall this week.

Current prediction

Short term:  none

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious, but not so dubious now.

15th October: The index is not showing any sign of bottoming. Blue chips such as HK Bank and Cheung Kong have not yet cancelled tops. If the index rallies further this week, we may be able to cancel those bearish threats. But we will still not have evidence of a bottom, other than a turn on a good long term support. For those who like a high risk, it could be the time to start accumulating. But for those who prefer a lower risk, cancellation of a the blue chip tops and a bottoming pattern would give greater comfort.

Current prediction

Short term:  none

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious, but not so dubious now.

8th October: Last week's comments still apply: the index has turned on a good long term support. But it hasn't bottomed and many of the blue chip stocks that we follow are still subject to top patterns, suggesting further falls.

Current prediction

Short term:  none

Medium term:  none

Long term: head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious, but not so dubious now.

1st October: The index has hit good long term support. There is an outstanding target for the index of around 8,000. But it is dubious. On the other hand, several blue chips have clear outstanding targets. These include Hongkong Bank and Cheung Kong, which are likely to lose at least 20% more of their value before bottoming. This suggests that the index is unlikely to be at its bottom. But we shall have to wait and see whether the long term support holds or fails.

Current prediction

Short term:  none

Medium term:  none

Long term:  1. head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious, but not so dubious now.
                    2. double top (weekly) pointing to 10,510 (log -done 14th Sept 01) and 9,525 (arithmetic- done 21 Sept).

17th September: The next good support is around 8,900. A strong rebound may be expected. But that should not be taken for a bottom. Long term support on the weekly charts could be as low as 8,000. If these supports break, we should look to the next support at 6,000.

Current prediction

Short term:  none

Medium term:  none

Long term: 1. double top points to 10,390(log - done 7th Sept. 01) and 9,270 (arithmetic - done 12th Sept 01)
                    2. head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious, but not so dubious now.
                    3. double top (weekly) pointing to 10,510 (log -done 14th Sept 01) and 9,525 (arithmetic)

10th September: A rebound may soon occur as there is good support approaching at 10,100. But a bottom is more likely to form at around 8,900, perhaps in a few months.

Current prediction

Short term:  none

Medium term:  none

Long term: 1. double top points to 10,390 (log - done 7th Sept. 01) and 9,270 (arithmetic)
                   2. head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious
                    3. double top (weekly) pointing to 10,510 (log) and 9,525 (arithmetic

27th August: The index fell towards target of 10,400 last week. I expect this target soon. After that, we are looking at supports. The strongest long term support is around 8,600 or 8,700. But there is no valid prediction to suggest a high probability of a fall to this level.

Current prediction

Short term:  none

Medium term:  none

Long term: 1. double top points to 10,390 (log) and 9,270 (arithmetic) - log target highly probable
                    2. head and shoulders top points to 7,980 (log) and 5,870 (arithmetic) - dubious
                  3. double top (weekly) pointing to 10,510 (log) and 9,525 (arithmetic)

20th August: Not much change this week, except to note that the top on the weekly chart is moving to target, suggesting that the daily chart will soon follow. There are a few wedges that could interrupt a fall to 8,500. But 10,500 looks like the next possible bottoming zone.

Current prediction

Short term:  none

Medium term:  none

Long term: 1. double top points to 10,390 (log) and 9,270 (arithmetic)
                    2. head and shoulders top points to 7,980 (log) and 5,870 (arithmetic)
                    3. double top (weekly) pointing to 10,510 (log) and 9,525 (arithmetic)

13th August: The support at 12,000 has broken. Thus our target of 10,400 has no strong support that could interrupt this target. Also, we have a new long term target of 7,900. But this target has problems. At least I would now expect the market to fall to around 9,000, by the end of this year, barring the unexpected.

Current prediction

Short term:  none

Medium term:  none

Long term: 1. double top points to 10,390 (log) and 9,270 (arithmetic)
                   2. head and shoulders top points to 7,980 (log) and 5,870 (arithmetic)

6th August: The index is still testing the 12,000 support. We could even see another top forming, drawing out the support testing process for several months. Alternatively, we could see a bottom form on the 12,000 support. But no evidence yet for such a scenario.

30th July:  The index is now testing an important support at 12,000. If the support breaks, a dubious pattern pointing to 7,900 would tentatively be valid. But the chances of a fall to 9,000 would increase. Evidence from the weekly chart suggests that the support will probably break.

The weekly chart has broken a support at 12,400. This support is analogous to the support on the daily chart at 12,000. As the weekly chart so often leads the daily chart by a few weeks, the probability of a break in the support on the daily chart is high.

Current prediction

Short term:  head and shoulders top points to 11,910

Medium term:  top points to 11,800

Long term: double top points to 10,390 (log) and 9,270 (arithmetic).

23rd July: There are one or two bright spots in the market. But the weekly chart has broken an important support, increasing the probability that the index will fall to 10,400, and perhaps even 9,000 by the end of the year.

Current prediction

Short term:  head and shoulders top points to 11,910

Medium term:  top points to 11,800

Long term: double top points to 10,390 (log) and 9,270 (arithmetic).

16th July: The index is still subject to the same bearish forces. HSBC is likely to fall at least until 80. The China fund failed a bullish pattern last week.

Current prediction

Short term:  head and shoulders top points to 12,390

Medium term:  top points to 11,800

Long term: double top points to 10,390 (log) and 9,270 (arithmetic)

9th July: The Hang Seng Index is still bearish. But the China fund is still bullish.

Current prediction

Short term:  head and shoulders top points to 12,390

Medium term:  top points to 11,800

Long term: double top points to 10,390 (log) and 9,270 (arithmetic).

23rd June: The barometer swings a little more to the positive side this week, as a rising channel emerges for the Hang Seng Index, one or two tops for blue chips are cancelled, or rendered questionable, and the China fund confirms a bullish pullback. But the long term for the Hang Seng Index is still under a bearish cloud pointing to 10,390.

Current prediction

Short term:  head and shoulders top points to 12,300

Medium term:  top points to 11,800

Long term: double top points to 10,390 (log) and 9,270 (arithmetic).

18th June: Some short term patterns confirm the bearish trend. All major stocks are bearish: HSBC, Cheung Kong, Hutchison and Swire Pacific all have bearish patterns. Even the China fund, which looked so bullish a couple of weeks ago, is now in danger of failure.

Current prediction

Short term:  head and shoulders top points to 12,200

Medium term:  top points to 11,800

Long term: double top points to 10,390 (log) and 9,270 (arithmetic).

4th June: Friday's close was lower than that of the previous recent low. We thus have a pullback to the neckline of the long term top, followed by a turn. This event confirms the long term double top. There is now a high probability that the index is going down to the 10,000 region. Some China stocks, on the other hand, and some second liners, look bullish. So the index is not yet setting the trend for the whole market.

Current prediction

Short term:  double top pointing to 12,550

Medium term:  top points to 11,800, cancelled at a close of 13,900

Long term: double top points to 10,390 (log) and 9,270 (arithmetic).

28th May: No substantial change last week. The index is still at the neckline of the long term and medium term double tops. A failure at this point is the most likely event. In the unlikely event that the index rallies further, we would need a close of around 14,250 to cancel the long term top. No indication yet of such a rally.

Current prediction

Short term:  none

Medium term:  top points to 11,800, cancelled at a close of 13,900

Long term: double top points to 10,390 (log) and 9,270 (arithmetic).

21st May: The index is still subject to bearish tops. Only a rally above 14,250 would remove the immediate threat. Blue chips such as HK bank and Hutchison are subject to similar tops to that of the index. But there is a bright spot. The China fund has made a good medium term bottom. And one or two Red Chips are looking good. Citic, for one, appears to have reversed, after reaching the log target of a long term top. Could the Red Chips be leading the index out of the mire?

Current prediction

Short term:  none

Medium term:  top points to 11,800, cancelled at a close of 13,900

Long term: double top points to 10,390 (log) and 9,270 (arithmetic).

14th May: The tops pointing to the 10,000 - 11,000 region are still valid. Tops for HSCBC, China Mobile and Hutchison are still valid. But the double top for Cheung Kong is cancelled. There is also a bullish reversal pattern for the fund. One or two other stocks are looking slightly bullish. So, while the presumption is still in favour of a bear market, the chance of a bottom at the current level has increased.

7th May: The index has not yet rallied sufficiently to cancel the top pointing to 10,400. The funds (HK and China) look hopeful: both have cancelled their bearish tops. If they are any indication of the market, we might hope that the index top will soon be cancelled. But many individual stocks paint a different picture: HSBC, Hutchison, China Mobile, and other stocks have confirmed their bearish tops. Unless there is a strong rally this week or next week, the greater probability is that 10,400 will be a medium term reality.

Current prediction

Short term:  none

Medium term:  top points to 11,800, cancelled at a close of 13,900

Long term: double top points to 10,450 (log) and 9,350 (arithmetic).

30th April: A little reversal pattern is building. But we need to see more volume. The greater danger is a right shoulder for a long term top pointing to 8,000. In the meantime, the top pointing to 10,500 is still persuasive.

23rd April: The index needs to close at 14,000 before we can cancel the top pointing to 10,400. Some stocks have cancelled their bearish tops. But others, HK Bank and Hutchison, still have valid bearish targets. We need to see these tops cancelled before we can put aside fears of a falling market. Then we need to see a reversal pattern before we can be confident of a bullish market. The last couple of weeks have been encouraging. But all that could wash away as easily, and unexpectedly, as it came.

9th April: There ain't much hope now for the ol' Hang Seng. At best we are looking at 10,400. But the best long term support is at around 8,800. My guess is that the Dow's impending fall to 8,000 will be sufficient to nudge the Hang Seng down to base support by mid year. Hutchison has broken a top that will most probably see that stock shed about half of its value.

Current prediction

Short term:  none

Medium term:  none

Long term: double top points to 10,450 (log) and 9,350 (arithmetic).

2nd April: The greater probability is that the index is going to 10,400. There are still one or two reasons for doubt. But they don't amount to much. Cheung Kong looks particularly bearish. But Hutchison and HK Bank could soon follow. Support at the current level is good. But if the index rebounds, chances are that it is going to make a shoulder for a target below 9,000.

Current prediction

Short term:  none

Medium term:  none

Long term: double top points to 10,450 (log) and 9,350 (arithmetic).

19th March: Evidence suggests that the index is heading for the 10,000 level, if not 8,000. HSBC and China Mobile are the clearest indicators that the bear has not finished with the market. Both of those stocks have clearly lower targets. The index touched a strong support last week and rebounded. But we should not presume that the intra-day low last week was a bottom.

Current prediction

Short term:  none

Medium term:  none

Long term: double top points to 10,450 (log) and 9,350 (arithmetic). Confirmed if index falls below 12,800.

12th March: The index is in danger of topping, with a target of 8,000 by the end of the year, Hutchison falling to 44, and HKBank and Cheung Kong each shedding around 30%. That is not a prediction, just a scenario. There are also positive scenarios to consider, such as a triangle, which is consistent with diminishing volume. Whatever happens, we shall have to wait for more data.

Since my namesake (or perhaps I am his) Barton Biggs is so well-loved in Hongkong, I should quote a recent comment by the learned analyst:
 

This Barton couldn't sum it up any better.

5th March: The best hope for the index now is a bottom somewhere between the current level and 13,200, forming over the next three to six weeks. A fall below 13,000 would give a high probability of a fall to 10,300. Stocks are mixed. Hutchison is close to a good support. Cheung Kong could be about to take a big tumble. China Mobile is set to fall another twenty percent, at least.

Current prediction

Short term:  none

Medium term: reverse head and shoulders (two heads) points to 17,300 - cancelled

Long term: none

26th February: There is still a bullish scenario for the index, provided the index continues to rally a little further and volume picks up. Otherwise, the outlook is bleak, with a downside of 10,000. Hongkong Bank looks bearish in the short term and Hutchison has broken a good long term support. But property stocks, such as Henderson Land, are still looking bullish. 14,500 would be an important support. If it breaks, a bearish long term outlook would prevail.

Current prediction

Short term:  none

Medium term: reverse head and shoulders (two heads) points to 17,300. Volume needs to pick up to around 20 billion HK dollars per day in order to make the prediction persuasive.

Long term: none

19th February: Much the same ambiguity as last week. Banks are looking precarious. But other stocks are well supported. There are also some stocks in a bull trend. We should, however, have a clear indication of the trend of the market if one of the heavy weights breaks out of a bearish pattern. That could happen this week. Hongkong Bank and Hang Seng Bank are two to watch.

Current prediction

Short term:  none

Medium term: reverse head and shoulders (two heads) points to 17,400. Volume needs to pick up to around 20 billion HK dollars per day in order to make the prediction persuasive.

Long term: none

12th February: No great change for the index. Some stocks, especially banks, are looking weak. Some movement in China stocks.

5th February: The index shows no change from last week. Some of the stocks are looking dangerous (Hang Seng Bank in particular), others are still quite bullish (Hysan).

Current prediction

Short term:  none

Medium term: reverse head and shoulders (two heads) points to 17,400. Volume needs to pick up to around 20 billion HK dollars per day in order to make the prediction persuasive.

Long term: none

29th January: Only two days of trading last week. Only one chart updated. Last week's intro still holds:

A reverse head and shoulders points to around 17,400. Our cautious bull is back. But volume is not really sufficient to give confidence that the index has made a good bottom. We need to see daily turnover around HK$20 million to inspire confidence. With luck we will see such figures this week, or, after Chinese New Year.

Current prediction

Short term:  none

Medium term: reverse head and shoulders (two heads) points to 17,400. Volume needs to pick up to around 20 billion HK dollars per day in order to make the prediction persuasive.

Long term: none

8th January: Some bullish activity in the index and many of the stocks. But one or two days of bullish activity doesn't amount to a trend indicator. There are still some lacklustre performances in the market. HSBC and Cheung Kong aren't showing strong volume, such as one would expect if a rally were commencing. On the other hand, the fund chart looks bullish, at least in the short term. 


2000

18th December: The index has broken out of a wedge pointing to 13,800, the previous low. There is possible support at 14,600. After that, it's anyone's guess. Some of the index stocks are bullish: Cheung Kong, Amoy and HK and China Gas. Others are bearish: HKBank and China Mobile. Anything could happen.

Current prediction

Short term:  A wedge could see the previous recent low retested.

Medium term: none

Long term: none

11th December: Some bullish things to report. First, a little island reversal last week could indicate an impending rally to the upper 15,000 level. Secondly, some stocks have shrugged off bearish patterns. Cheung Kong has broken out of a nice reversal pattern, but strong resistance is approaching. Hongkong Bank, on the other hand, is rallying again on weak volume. That does not portend well for the stock or the market.

Volume for the market is increasing. A breakout above 15,700 on strong volume will give a chance at 17,200.

Current prediction

Short term:  An island reversal could see 15,700 this week.

Medium term: none

Long term: none

4th December: The index tested the support at 13,900, as expected. A short term pattern now points lower. But a short term pattern is no good guide to the strength of a long term support. No doubt a plunge in the Nasdaq would likely tip the Hang Seng off its perch. A fall below 13,500 would break a double top. 10,400 would be target to look out for.

Current prediction

Short term:  Head and shoulders top points to 13,650.

27th November:  The index is sitting on the higher of two parallel supports. A short term top suggests that the index will fall to the lower of these supports, at around 13,700. No further indication of trend can be taken from the index. But HK Bank and China Mobile both look bearish. We shall have to see whether the bearish implications of these large capitalized stocks exceeds that of the short term top. If the index breaks a long term double top, resembling that of the Nasdaq, a fall to 10,500, and even 8,500, is conceivable.

Current prediction

Short term:  Head and shoulders top points to 13,700.

20th November: Still an uncertain market. We have both positive and negative scenarios with evidence to support each. But there is nothing persuasive at the moment.

Keep an eye on HK Bank. It's looking weak. A double top scenario is forming. Falling volume supports the scenario. A fall below 102 could see another big fall. If it is any indication of the direction of the market as a whole, the outlook is not encouraging.

13th November: The index lost a few hundred points last week. That fact alone is not alarming. The lack of volume in the market is more concerning. If the US markets plunge, as looks likely, I fear that the Hang Seng will retest 14,500 again. But there are no valid targets for this market. We will have to wait and see.

6th November: A very interesting week indeed! Our long term head and shoulders top, pointing to 10,500 is now cancelled. We have a little pattern pointing to 16,200. Nearly all of the stocks with bearish patterns have rallied such that the bearish patterns are cancelled. HSBC has made a new high. But in all of this, one thing is still lacking: volume. Take a look at the China Mobile chart for an example of good volume and compare that chart with all of the other stocks. Also, take a look at #5. It is right on long term resistance and will remain so until it breaks HK$123.

We are left in limbo again. On one hand, our fears of a crash to 10,500 have been dispelled. But on the other hand, our hopes of a long term bull trend have little fuel. The fuel that we need to confirm the reversal would be a few days of volume reaching as much as HK$25 billion.

Current prediction

Short term: a reverse head and shoulders points to 16,900. Volume does not support the pattern. But the medium term triangle scenario could take the index to this level without relying on the reverse head and shoulders.

30th October: Last week we saw consolidation on low volume. This does not auger well for the market. If we are going to see a reversal, increasing volume would be the signal. Many large cap stocks had a chance of reversing last week. But none of them did. Let's see what this week brings.

Current prediction

Short term: a reverse head and shoulders points to 16,900. Volume does not support the pattern. But the medium term triangle scenario could take the index to this level without relying on the reverse head and shoulders.

23rd October: The index made an impressive rally last Friday. But nothing much can be made from one day. Many blue chips have a chance of escaping their bearish patterns. But others, such as Hutchison, Henderson, and some Red Chips such as Citic, are still subject to bearish forces. The index is still subject to a bearish pattern. But the pattern is not a good one. Better to await further evidence. In the meantime, I would presume that the bear is still in charge.

Current prediction

Short term: a reverse head and shoulders points to 16,900. Volume does not support the pattern. But the medium term triangle scenario could take the index to this level without relying on the reverse head and shoulders.

Medium term: none

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

16th October: The index fell below our triangle support from last week. But it ended the week right on a strong long term support. If the support breaks, a head and shoulders top will have broken. This pattern is not reliable due to the steeply rising neckline. But there would be nothing else to go until the index fell below 13,500. If the index fell below that level, we could expect a further stage of bearishness to take the index as low as 8,500 by March next year.

Some guidance may be taken from some of the blue chips. Both Cheung Kong and Hongkong Bank ended last week right on the neckline of respective top patterns. If these patterns break next week, we would have a clear indication of impending falls for the index. Hutchison and New World have broken similar patterns. Chances are that # 1 and #5 will take their cue. 86 and 100 are the respective neckline supports for Cheung Kong and HK Bank respectively. If these fail next week, we will have evidence of further bearishness to come.

Current prediction

Short term: a reverse head and shoulders points to 16,900. Volume does not support the pattern. But the medium term triangle scenario could take the index to this level without relying on the reverse head and shoulders.

Medium term: none

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

9th October: The index is looking rather bearish, despite the nice rally last week. A reverse head and shoulders broke out last week. It points to 16,900. But the volume was unimpressive. Chances are that the pattern will fail. On the other hand, the triangle scenario shown below might account for the low volume while still giving a bullish outcome. We shall have to see, if the index rallies to 17,000.

14,700 is now the critical support, just a little higher than the recent low. If the index fails this support, we can expect a lot more bearishness, with a downside of 8,500.

Current prediction

Short term: a reverse head and shoulders points to 16,900. Volume does not support the pattern. But the medium term triangle scenario could take the index to this level without relying on the reverse head and shoulders.

Medium term: none

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

2nd October: The index rose last week on low volume, making a rising wedge shape. This is bearish for the short term. Chances are that the index will return to its previous low, at least. Beyond that, we have no clear indication.

Current prediction

Short term: a double top points to 15,400.

Medium term: none

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

25th September: Good support at Friday's close and a possible triangle forming give hope that the Hang Seng is not headed for a  prolonged bear market. If the current support fails, we shall be waiting to see the strength of the support at 13,500. If this fails, my worst case is a downside of around 8,500. Many blue and red chips have made bearish tops, supporting the prolonged bear market scenario.

Current prediction

Short term: a double top points to 15,400.

Medium term: none

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

18th September: The index has clearly topped. My triangle target of 15,600 was reached today. We have a target and support at 15,400. Then we shall have to wait and see what happens. The long term bearish scenario gives us a possible target of 9,100. But this is not confirmed and will not be confirmed for some time, if at all. Worst case scenario is a fall back to 8,000. At that point we could hope for a huge double bottom.

Current prediction

Short term: a double top points to 15,400.

Medium term: none

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

11th September: The index is looking bearish. Volume is falling off, and many stocks are showing signs of topping. Furthermore, the bullish pattern pointing to 19,000 is cancelled due to lapse of time. The crucial support is at around 17,000. If this support breaks, a triangle will point to 15,600. And there is a long term double top danger to contend with. Some stocks are still bullish. But if the support at 17,000 breaks, it would be wiser to presume the worst.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 19,300. Volume is persuasive.

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

4th September: The index is making a short term triangle pattern. The short term trend will follow the direction of breakout from the triangle, provided the breakout happens in a week or two. On the long term charts, the index is a strong resistance at the current level, and at about 17,800. Volume has dribbled off in the last couple of weeks, not helping the prospects of the index. But this dissipation could be due to the triangle formation, which, in order to be valid, requires falling volume. The Hang Seng Index once again leaves us without a clear direction.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 19,300. Volume is persuasive.

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

14th August: The index is teasing us again, coming very close to the neckline of our pattern that points to 19,300. Some long term charts also make the index look rather vulnerable.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 19,300. Volume is persuasive.

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

7th August: The index made a nice recovery last week. Chances of 19,300 are good. But there is still the danger of a long term double top, with deep downside.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 19,300. Volume is persuasive.

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

31st July: The Hang Seng Index fell below the neckline of our bullish pattern. Another day of falls will cancel our target of 19,300. On the other hand, the index rarely fails to reach target after having made a good pattern. The pattern that currently points to 19,300 is a good pattern and has a good chance of succeeding. We shall have to see tomorrow.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 19,300. Volume is persuasive.

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

24th July: Volume passed the HK$20 billion mark last Friday, adding further evidence for sustained rally. Target of 19,300 is a good probability. However, the index has almost touched weekly resistance at 18,000. We can breath a sigh of relief if this breaks. Watch out for a turn at 18,600. Strong daily resistance at this level.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 19,300. Volume is persuasive.

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

17th July: The index rallied last week on strong volume, increasing the probability that the index will rally to at least 19,300. Negative factors include resistance on the long term daily and weekly charts at the current level, at 18,000 until around 18,700.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 19,300. Volume is persuasive.

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

10th July: The index broke out of a reverse head and shoulders pointing to 19,300. Volume was fair, but not conclusive. There's a fairly good chance that the index will get to 19,200 or 19,300. But without high volume, in the order of HK$30 or 40 billion per day, for a few days, chances are that the index will not get past the target.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 19,300. Volume is not ideal, but the pattern still has a fair chance.

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

3rd July: The index is not looking bullish. Nor are the individual stocks. A little top is forming. Only a breakout above 16,750 on strong volume will change the picture and give a bullish prediction.

Current prediction

Short term: none

Medium term: none

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

26th June: A fall to 15,600 will break a short term top. But this may take a week or two to happen. Most blue chip stocks are looking bearish. 16,250 is likely to be the resistance.

Current prediction

Short term: none

Medium term: none

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

19th June: The index broke out of a  little reverse head and shoulders pointing to 18,750. But the volume on breakout was insufficient to confirm the target. Some stocks are looking promising in the short term - property stocks in particular. But volume is weak with many blue chips, suggesting a danger that the current rally could collapse.

Current prediction

Short term: none

Medium term: none

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

12th June: Quite a bit of ambiguity in the market. Average volume is low, suggesting that the current rally is unsustainable. But there are no reliable patterns pointing one way or the other. Many individual stocks are looking bearish. But there are some stocks with bearish tops which have rallied to the point of cancelling the pattern. This makes for a volatile and unpredictable environment. With luck, we will see a clear pattern emerge over the coming weeks or months.

Current prediction

Short term: none

Medium term: none

Long term: The weekly reverse head and shoulders points to 20,000. It is technically valid. But it is unreliable, due to the steep pullback below the neckline.

5th June: The index made an impressive rally last week, cancelling a bearish target. But it has not yet given any evidence of a reversal of the medium term bearish trend. Take a good look at the long term daily chart, showing the failed head and shoulders top of last October and the current failed top. The index could be teasing us, as it did then. But to be sure, I would like to see a reversal pattern with volume reaching HK$20 billion, over the next week or two.

15th May: The index now has a couple of supports at 14,200. If they break, I fear there's nothing more to save the bull market. Until they break, the pattern pointing to 20,500 is valid. I'm reluctant to cancel this pattern, due to its good formation. Hence the frequent changes of critical support (last week it appeared that 14,600 was the critical support). But if 14,200 fails, we are unlikely to find anything else.

Beware of a rally to 16,000 or 16,500 on low volume. That could be the right shoulder for a big top pointing to 11,000. On the other hand, the index turned last week on the super long support. There is a good chance that we are about to see a surge to 19,000 before the next major long term resistance operates. It could go either way.

No updates on 22nd and 29th. With luck the picture will be clearer upon my return.

Current prediction

Short term: double top will point to 14,200 if the index breaks 14,500.

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Cancelled if the index falls below 14,500.

8th May: The index is still hovering around the long term support. A little wedge breakout last week suggests a return to 14,600. But only a fall below that level will reverse the trend and cancel the target of 20,500.

Current prediction

Short term: double top will point to 14,200 if the index breaks 14,500.

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Cancelled if the index falls below 14,500.

1st May: Volume last week was low. That could be explained by the impending long weekend. But I doubt it. The greater probability is that the index is going down. We have a valid top pointing to 14,200. Crucial support is at around 14,600. If this support breaks we should be prepared to abandon our target of 20,500.

Current prediction

Short term: double top will point to 14,200 if the index breaks 14,500.

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Cancelled if the index falls below 14,500.

24th April: The long term trend is still being tested. The index turned on a long term support last week. If the support holds, we could still see a rally to 20,500. If the support fails, we shall have to cancel the prediction.

Current prediction

Short term: double top will point to 14,200 if the index breaks 14,500.

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Cancelled if the index falls below 14,500.

17th April: The index fell below the neckline of our reverse head and shoulders but not below the next channel support. A fall below the channel support, at 14,500 would cancel the prediction of 20,500 and reverse the long term trend.

Current prediction

Short term: double top will point to 14,200 if the index breaks 14,500.

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Cancelled if the index falls below 14,500.

25th March: The index has been suffering from low volume in recent weeks. From a high of HK$35 billion in February, we are now seeing a modest HK$11, 12 and 14 billion per day. This is not the stuff to inspire confidence in a bullish prediction of 20,500, which I am advocating.

The Hongkong market loves to tease. It could be teasing us now with a triangle. This is the only pattern during which volume falls off, yet which could portend a bullish breakout. If this occurs, breakout should be on volume of about HK$35 to 40 billion. This could take time, and a fall back to 16,500 might assist such a build-up.

Current prediction

Short term: Possible ascending triangle forming. A break above 18,300 on strong volume - HK$30 billion or more, would confirm a breakout, and the rally to 20,500.

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Increasing volume and two turns on the neckline confirm the prediction.

20th March: Volume last Friday was disappointing. The index rallied some 723 points on turnover of only HK$12 billion. That is a small sum compared to the HK$21 billion recorded a week or two before. It is therefore likely that the rally is unsustainable. On the other hand, the long term trend is still rising and our target of 20,500 is still valid. This target remains valid unless the index falls below 15,000. No indication of such a fall yet.

Current prediction

Short term: wedge points to 15,900, or thereabouts. But channel support at around 16,600 could intervene.

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Increasing volume and two turns on the neckline confirm the prediction.

13th March:  A nasty fall today could see the index test 15,900 this week. But a channel support could hold the index at 16,600. The index broke a weekly resistance. But it closed on the daily chart at a five-year long term resistance last week. The long term fund chart also shows resistance. If the market is topping, last week's close would be a logical place for a high. On the other hand, we still have an outstanding target above 20,000 that will only be cancelled if the index falls below 15,200. (That's still quite a way down.) The index could therefore continue teasing us, as it did last year, on its way from 12,000 to 15,500. Those who had faith in the long term trend last year were rewarded. Let us hope the same faith will be rewarded this year.

Current prediction

Short term: wedge points to 15,900, or thereabouts. But channel support at around 16,600 could intervene.

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Increasing volume and two turns on the neckline confirm the prediction.

6th March: Today the index closed at a new high. Volume was better than that of last week. But it wasn't great. We could still see a double top. But the chances of a double top are much less now that the index has made a new high and broken a key long term resistance.

Current prediction

Short term: none

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Increasing volume and two turns on the neckline confirm the prediction.

28th February: The index turned on neckline support, giving further confirmation of our target of 20,500. However, volume on the rallies of Thursday and Friday last were disappointing, giving rise to the possibility of a double top failure for the index. Individual stocks look weak. Cheung Kong still doesn't have volume. Other blue chips are in bear mode. The longest term fund chart shows strong resistance. Not a resounding bull market by any means. But until the index falls below the neckline of our reverse head and shoulders, somewhere around 15,500, the greater probability still favours 20,500.

Current prediction

Short term: none

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Increasing volume and two turns on the neckline confirm the prediction.

21st February: The index is still poised at a significant long term junction. The danger is a fall below 15,000, which could start a medium term bearish trend, resulting in a fall to 12,000 by the end of the year. The upside is a new scenario which could see the index at 22,000 by the end of the year. The neckline of our currently valid reverse head and shoulders is the important dividing line. This neckline line currently sits at around 15,100.

One encouraging phenomenon to note is the rebound of China Light and Power. This stock has rebounded above the neckline of a bearish double top. HK Bank is also making encouraging signs. A rally to 22,000 would require assistance from these blue chips. We might be seeing evidence of such assistance.

Current prediction

Short term: double top points to 15,300 - support at 15,700 could intervene

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Increasing volume and two turns on the neckline confirm the prediction.

14th February: Three days of heavy volume last week add further confirmation to our target of 20,500. We now have two pullbacks to the neckline and steadily increasing volume. These are the ingredients of a high probability prediction.

Predictions can, however, fail. It pays to keep an eye on the factors that could undo the bullish picture: There are two phenomena that I am monitoring. Firstly, there are two strong long term resistances coincide at the current level. If the target of 20,500 is to fail, the current level would be the obvious point of failure.

Further, of the stocks that I follow there is none that confirms, with a high degree of probability, the higher target for the index. Many blue chips are stuck in a medium term bearish trend. A hand full of stocks are propelling the index higher.
Of these, only Cheung Kong points to a higher target. But that stock is marred by poor volume, making the prediction at best a medium probability. Although the index target is valid, we do not have the confirmation in the individual stocks that would add confidence.

We are left with bullish and not so bullish factors to weigh. In balance, I favour our target of 20,500. But it could be a bumpy road.

Weekly resistance this week is at 18,000.

Current prediction

Short term: none

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Increasing volume and two turns on the neckline confirm the prediction.

7th February: Last week the index consolidated above the neckline of our long term pattern that points to 21,500. This is a healthy sign. Volume is still good. There is resistance in the short term. But there is no reason yet to suspect failure of the target of 20,500.

Current prediction

Short term: none

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Volume is steadily picking up. The prediction will be confirmed by a turn on the neckline, currently at 15,100 -15,300. A fall through 15,000 will cast doubt on the prediction.

31st January: The long term looks bullish. The index has turned, as expected on our long term reverse head and shoulders neckline after a second pullback. Volume is good. These factors confirm our target of 20,500.

However, in all bullish predictions there is the risk of failure. This risk is higher at certain times than others. The index must now make a second attempt to break 17,400. If there is to be failure, we should notice it at this level. Lower volume, than that of the first peak, would be a warning sign.

There are some worrying points to note: Cheung Kong, a very blue chip, is rising on falling volume. This is contrary to principle and dangerous. There are also some blue chip stocks, such as Swire Pacific and Wharf, that are in a bearish trend. They both have outstanding bearish targets. Other stocks, such as Hutchison, look good.

The bottom line is to presume the long term trend: which is clearly bullish. You might recall that in April last year I had a prediction of 15,500. The market vacillated up and down. The prediction looked at times doubtful. But it was nonetheless reached within the allowable time. The moral of the story is to keep one's nose on the long term prediction.

Current prediction

Short term: none

Medium term: none

Long term: A reverse head and shoulders points to 20,500, or thereabouts. Volume is steadily picking up. The prediction will be confirmed by a turn on the neckline, currently at 15,100 -15,300. A fall through 15,000 will cast doubt on the prediction.

10th January: The sharp drop of the index last week was most likely a mere pullback to the neckline of our long term pattern. Increasing volume is encouraging. If gives hope that the target of somewhere above 21,000 will rapidly be attained.

A small double top in the short term picture need not cause concern, (given the superior weight attributable to the neckline of the reverse head and shoulders) provided the neckline holds.

Not all stocks are benefiting from the current rally. Volume usually holds the key to successful stock - picking. I have included some lemons by way of counter-example - and a paradigm of good volume.

Current prediction

Short term: none

Medium term: none

Long term: A reverse head and shoulders points to 21,500, or thereabouts. Volume is steadily picking up. The prediction will be confirmed by a turn on the neckline, currently at 15,100 - 300. A fall through 15,000 will cast doubt on the prediction.


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