Hexun Investment Advisor Feng Lushun: March 17th, How Will Hang Seng Tech Index Move Next

On March 17, we analyze the trend of the Hang Seng Tech Index. That day, the index experienced a sharp rise followed by a pullback. After this surge and retreat, when can we expect the decline to stop and a rebound to occur, leading to another upward wave? We analyze this through volume-price relationships.

From the overall structure, the Hang Seng Tech Index has undergone a prolonged adjustment. In terms of decline, the total drop exceeds 30%; in terms of time, the adjustment has lasted more than half a year. Therefore, from both time and space perspectives, the index has entered a bottoming zone.

So, has the bottom already arrived? First, refer to Gann theory. According to Gann theory, each time the index breaks below the Gann lower limit (the green line in the chart), a rebound usually follows; the rebound after last month’s break is an example. Conversely, breaking above the upper limit often leads to a retreat. The surge and pullback on March 17 was mainly due to touching the Gann upper limit, consistent with this theory.

On the daily chart, the core of the upward trend lies in support levels. Whether support is effective depends on the attitude of major funds. By observing volume, we see that during previous rises, a large bullish candle appeared, which typically indicates institutional entry. We can draw a horizontal line at the closing price of this bullish candle as a reference for future support. As long as this support level is not broken, the rebound basis remains intact. In fact, after the index retested this support a few days ago, a strong bullish candle appeared, confirming the support’s validity.

Once support is confirmed, the next step is to challenge resistance levels. On the daily chart, the index previously broke below a platform, forming a bearish break line, indicating some funds have exited. To regain strength, the index needs to recover this bearish line, ideally forming a “bullish engulfing” pattern. Currently, this condition has not been met. We can draw a horizontal line at the midpoint of this volume-spiking bearish candle as a short-term strong resistance level. The surge and pullback on March 17 was precisely hindered by this resistance.

Next, focus on the support from the 5-day and 10-day moving averages. Currently, these two moving averages have not yet crossed. If the index can hold the 5-day moving average, there remains a basis for a rebound; if the 5-day moving average is broken, the index may retest the previous bullish support level. Therefore, in the short term, the key observation is the support zone formed by the 5-day and 10-day moving averages.