CFD Update: HK50 breakout setting up new move to retest trendline?
Looking at the HK50 today, we can see the price has started to break out of its consolidation pattern. Last month we discussed the plunge we saw on the HK50 as the price crashed back to 18,139. Things changed dramatically as buyers surged the price higher, adding 10% in one session.
Since that session, we have been watching the consolidation pattern as it started to form and then continued to develop. The pattern took on an ascending triangle shape. These are normally seen as bullish continuation type patterns.
This fits in nicely in this situation as price is trading in a new uptrend after buyers broke the fast downtrend back in March.
Today buyers took the next step with a breakout of the pattern. So far, so good as the price continues to trade above last week’s highs. We want to see price close above 22,450 to confirm the break. A move back inside the range casts doubt on buyer momentum. If we do see a newly confirmed break, we would like to see buyers break the first level of resistance. A break of that level, and we would look for a possible move that could retest the main downtrend line.
Step one for bulls is to confirm the break and beat resistance.
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