Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

• Reopened after yesterday’s closure to due typhoon, shed -2% due to negative follow-through from yesterday’s weak China economic data.
• Short-term minor uptrend from the 7 July 2023 low remains intact.
• Short-term downside momentum reached oversold condition.

One of China’s proxies benchmark stock indices, the Hang Seng Index plummeted today, 18 July at the open and shed -2% intraday at this time of the writing due to a negative follow-through from yesterday’s weak China data (Q2 GDP, retail sales, and youth unemployment) as the Hong Kong stock exchange was shut yesterday due to typhoon.

The Hong Kong 33 Index (a proxy for the Hang Seng Index futures) has pierced below its 200-day moving average but so far has managed to hold at the minor ascending trendline support in place since the 7 July 2023 low of 18,222.

 

 

 

Short-term downside momentum may be dissipating

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Fig 1: Hong Kong 33 minor short-term trend as of 18 Jul 2023 (Source: TradingView, click to enlarge chart)

Short-term downside momentum has reached the oversold region as indicated by the hourly RSI and it is now inching upwards which suggests that downside momentum of the current slide from 14 July 2023 high to today’s 18 July intraday low of 18,947 may have waned.

Watch the 18,900 key short-term pivotal support and clearance above the 200-day moving average now acting as an intermediate resistance at 19,245 sees the next resistances coming in at 19,570 and 19.900 (upper boundary of the medium-term range configuration).

However, failure to hold above 18,900 damages the minor uptrend to expose the key medium-term support of 18,220/130.