Hang Seng China Enterprises Index – a 5.8% decline at yesterday’s lows

Tony: Founder of KhronoStock.com and KhronoStock Blog Network

Update on Heng Seng China Enterprises Index from KhronoStock contributor Joseph of TradingPoints.net.

BY TRADINGPOINTS ⋅ JULY 29, 2009 ⋅ POST A COMMENT

Once the market broke 12,186 hourly support in the 2nd hour of trading, the HSCEI cascaded lower into daily symmetry support at 11,732 before recovering to close at 11,991, down – 3.5% on the day.

Daily Trading Signals

The following signals were generated for 30 Jul:.

The Momentum Reversal Buy Signal is a stronger reversal indication than the Low Continuation & Reversal signal. This momentum reversal signals typically fire following a trend move the previous day that has traveled too far, too fast and is accompanied by an extreme short term Relative Strength Index that indicate a very high probability for a reversal. While the Low Continuation Reversal Signal points to a good likelihood for a reversal move sometime during the trading day, the Momentum Rebound Buy Signal use the 1st hour high as a specific price level that needs to be exceeded to trigger the Momentum Rebound Buy Signal.

Exceeding the high reached in 1st hour of trading triggers the Buy signal.

The 2 period ROC Bearish Indicator should be used more as a guideline, as it is a signal prone to whipsaws. The ROC Bearish indicator works best in choppy markets or after a compressed trend move has occurred. The method is based on George Taylor’s trading technique. Taylor observed there was a natural rhythm to the markets and that every 2 or 3 days (or more accurately every 2 or 3 periods) would cycle between buy and sell days.

Based on the price action over the past three days, this signal quantifies that a sell signal triggered on the close of the previous day. The bearish indication is best used in conjunction with reversal signals triggered for the current day’s trading.

Today’s daily pivot is 12,037, and the weekly pivot is 11,749. Price action above the daily pivot is bullish.

The HSCEI normal trading range is projected to be between 11,664 – 12,338.

The HSCEI extended trading range is projected to be 12,414 – 12,568.

Specific price levels and projections are discussed on the charts below.

Short term 60 Min

The 60 min charts are bearish 12,096 is the 50% retrace of yesterday’s decline.

Daily

After reaching extended weekly & monthly Fib 1.618 projections and breaking 60 min support, prices fell to 11,732 @ initial daily symmetry support between 11,683 – 11,729. A daily close below 11,683 and larger support is found between 11,328 – 11,422.

Weekly

The weekly oscillator crossed bullish on Friday 17 Jul. Weekly symmetry support is 10,088 – 10,402. A weekly close < 10,088 argues for a larger correction to long term support @ 8,774.

Updated Hourly, Daily, Weekly charts with additional Fib support and projection levels are posted below.

Support & Resistance Levels and Daily Signals are posted in each section.