2008

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

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

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

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

 

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

Short term: none

Medium term:  reverse head and shoulders points to 23,000 - done

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

 

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

Short term: none

Medium term:  reverse head and shoulders points to 23,000

Long term: double bottom points to 27,500

 

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

Short term: none

Medium term:  reverese head and shoulders points to 23,000

Long term: double bottom points to 27,500

 

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

Short term: none

Medium term:  none

Long term: double bottom points to 27,500

 

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

Short term: none

Medium term:  none

Long term: double bottom points to 27,500

 

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

Short term: none

Medium term:  none

Long term: double bottom points to 27,500

 

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

Short term: none

Medium term:  none

Long term: double bottom points to 27,500

 

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

Short term: none

Medium term:  none

Long term: double bottom points to 27,500

  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

Short term: double bottom points to 20,300

Medium term:  none

Long term: none

 

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

Short term: double bottom points to 20,300

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

Short term: none

Medium term:  none

Long term: none

 

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

Short term: none

Medium term:  none

Long term: none

 

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

Short term: none

Medium term:  none

Long term: none

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

Short term: none

Medium term:  none

Long term: none

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

Short term: none

Medium term:  none

Long term: none

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

Short term:none

Medium term:  none

Long term: none

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.

Current prediction

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

Medium term:  none

Long term: none

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:

• steadily increasing volume for the index and blue chips,
• symmetrical bottoming patterns;
• index and fund turning on long term support
• breakout from strong resistances

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) <