Hang Seng Index Reaches 4-Year Peak

As the chart illustrates, Hong Kongโs Hang Seng Index (Hong Kong 50 on FXOpen) climbed above the 27,300 level today โ marking the first time it has reached such heights since summer 2021. This bullish momentum has been partly driven by positive corporate news. According to media reports:
โ Shares of Chinese EV maker NIO Inc. surged around 5% later than announcing a 64.1% year-on-year increase in vehicle deliveries.
โ Ascletis Pharma Inc. saw its shares jump 12.8% following the announcement of a share purchaseback programme.
โ Alibaba shares rose 4% later than JPMorgan raised its price target by over 40%, citing strong developments in the AI sector and robust user engagement.
Since 1 September, the Hang Seng Index (Hong Kong 50 on FXOpen) has gained more than 7%.
Technical Analysis of the Hang Seng Index Chart
In our review of the index chart on 23 September, we:
โ Highlighted that the price had tested and fallen to the lower boundary of the blue ascending channel.
โ Noted ahead signs of demand emerging around the key psychological 26,000 level.
Since then (as shown by the arrow), price action has been well supported at these levels. On 26 September, bears made another attempt to push the index below 26,000 but failed โ giving bulls the advantage and enabling a steep upward movement, depicted in orange on the chart.
From a bullish perspective:
โ The market has resumed its uptrend, breaking decisively above the corrective bull flag pattern (shown in red).
โ The September high near the psychological 27,000 level was convincingly breached โ the long candlestick points to a clear demandโsupply imbalance favouring purchaviewrs, reinforcing the importance of the bullish Fair Value Gap (FVG) pattern highlighted in purple.
โ Price is now trading in the upper half of the blue channel, which signals strong purchaseing interest.
At the identical time, the RSI indicator has entered overbought territory. Once the initial wave of optimism fades, profit-taking could occur, potentially triggering a correction. This may involve a retest of the 27,000 level or even the lower orange trendline.
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