The Hang Seng Index ( $HSI(HSI)$ ) tracks the largest and most liquid companies listed on the Hong Kong Stock Exchange, spanning sectors from technology to financials and property.
In this analysis, follow the technical chart story of HSI from ‘Long-Term Resistance → Multi-Year Support/Resistance Zone → Head and Shoulder Breakdown → Possible Support.’
① Long-Term Downtrend Resistance (Monthly Chart)
On the monthly chart, HSI has been capped by a descending trendline drawn from the 2018 highs. Price action over the past two years has been forming a series of higher lows and higher highs, bringing the index back up toward this multi-year resistance line.
② Multi-Year Support/Resistance Zone — Now at Possible Support
The same monthly chart shows a horizontal zone that has acted as both support and resistance multiple times since 2022. After the recent pullback, price has returned to this zone, placing HSI at a possible support area around 22,260 to 22,600.
③ Daily Chart: Head and Shoulder Reversal Pattern Completed
Zooming into the daily timeframe, HSI has completed a lengthy Head and Shoulder reversal pattern. Price has broken below the neckline and is currently trading beneath a cluster of key moving averages — the MA100 and MA200 — reflecting bearishness in the short term.
④ Immediate Resistance and Momentum Reading
Immediate resistance on the daily chart sits around 24,500, marking the level price would need to reclaim to ease the current bearish structure. At the time of writing, even with price testing the possible support zone, there is no bullish reversal pattern in place, and the MACD continues to show bearish momentum.
Using Structured Warrants for Short-Term Trading
A call warrant increases in value when the underlying index rises. A put warrant increases in value when the underlying index falls.
A trader who forms a view that HSI may hold within the 22,260–22,600 support zone and attempt to recover toward the 24,500 resistance level might look at a call warrant (HSI 24800MBeCW260828 ( $HSI 24800MBeCW260828(PQVW.SI)$ ))(https://warrants.com.sg/tools/livematrix/PQVW) as one way to express that view.
Conversely, a trader who believes the support zone may not hold, and that price could break down further given the bearish MACD reading, might consider a put warrant (HSI 19400MBePW260929 ( $HSI 19400MBePW260929(SMXW.SI)$ ))(https://warrants.com.sg/tools/livematrix/SMXW) as one way to express that view instead.
Structured warrants are short-term trading instruments that magnify both gains and losses; their value is affected by the underlying price, volatility, and time to expiry.
Note: The featured call or put warrant is one of the warrants quoted on tight spreads and high liquidity. They are also known as trending warrants.
DISCLAIMER
Information found in Binni Ong commentary is not an offer or solicitation to buy or sell, nor financial advice or recommendation for any investment product. She is providing education and training, and is not regulated by the Monetary Authority of Singapore or any financial regulatory body.
This commentary piece is sponsored by Macquarie Warrants Singapore. The views expressed by Binni Ong do not represent the views of Macquarie Group, nor its affiliates.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
Investment products including warrants are subject to significant investment risks, including the possible loss of the principal amount invested.
Where past performance is referred to, it is not indicative of future performance. Examples quoted in this presentation are for illustration purposes only and do not represent any investment views or strategies. Advice should be sought from a financial adviser regarding the suitability of the investment product before you commit to invest in it.
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