Hsi1
HSI1! 2021 Jan 06 Midweek Update
HKEX:HSI1!
HSI1! 2021 Jan 06 Midweek update
Post Monday 4 Jan's observation
Price if continues on an uptrend, I will look to buy
if I see a Ultra High Volume wide spread
down bar has formed, examples marked by red triangle.
Remember to look for entry on a lower timeframe.
Resistant3 = 28619 - 28755
Resistant2 = 28318 - 28379
Resistant1 = 27901 - 28012
Intermediate resistant = 27753 (price rejection from 2020 Feb 10)
Support1 = 27325 - 27400
Support2 = 26854 - 26947
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HSI1! 2021 Jan 04 WeekHS1!
Immediate resistance = 27324 - 27400
Immediate support = 26854 - 26947
A = Pushed through an old top 27077 on high volume
B = Weakness is seen from the selling and closing near the low
Watch Monday's close for indication from big boys.
Trade management
TP can be 30% / 50% of range or between the range.
Accumulation and Timing the Trades.For second week in a row, we sold on Thursday anticipating a selloff on Friday but both times it happened on Monday. We sold in good areas but timing was off by a day. I am not comfortable holding a trade over the weekend unless well in profit. It can be argued that trades should be given enough room and time. Valid point but Gaps are a common theme in HSI futures and i have seen gaps of up to 1000 points. I always insist on timing the trades because i personally like to time the quickest moves in the market and then spend majority of the time on the sidelines. Staying on the sidelines help me stay unbiased.
For market makers to accumulate, we retail traders have to sell. In order for us to sell, market has to look weak, indicators have to give sell signals, wave counts have to suggest 3rd of 3rd of 3rd. Up moves have to look laboured while the sharp moves are swift and so on.
HS1! 2020 Dec 07 WeekHS1!
Scenario - Short
Short from Resistant 1
Target 1 = 50% of range
Target 2 = 26680
Extended target = Support 1
Support 2 = critical support
Scenario - Long
Would prefer to long at support zone
Target 1 = 50% of range
Selloff ImminentExpecting HSI to top at 27100-250 area and make its way down within next few days.
26750-800 is the key support. Distribution as of now does not support a broader selloff.
If you are new, i update regularly throughout the week within this post as the action unfolds.
Trying to make sense of volumeCovid 19 crash saw huge volume on 20 straight days. While volume reflected on intraday time frames was higher than average, it was no way near as much as the cumulative daily volume shown on a Daily chart. Upon noticing similar thing happening in last 5 days, i dig it up a bit and found this, " Charts that utilize a periodicity of "Daily" will show a different quantity of Volume when compared to charts that utilize an intraday periodicty like 1 minute or 1 Day*. This is caused by the fact that certain types of trades, such as block trades, spread trades and market trades, are considered by the exchange when reporting the cumulative daily volume for a specific symbol or contract. However, those trades are not represented in the tick or 1-minute intraday data for the symbol. These trades together make up the difference observed between the daily volume and the sum of the intraday volume. ".
Notice how the price is stuck between the high of the first day and low of the last of those huge volume days, surely not a coincidence. I have a theory but my knowledge is very limited. You can read more about block trades here www.investopedia.com and try to make sense of things.
Current setup is very similar to the one prior to the covid 19 crash and the end of June. Accumulation observed on the intraday while big blocks reflected in cumulative daily volume. One crashed, the other rallied. Which one will it be this time? Pre covid setup came after distribution and a selloff whereas end of June was after accumulation and a rally.
I will be updating here during the rest of the week. Pls share your thoughts.
Accumulation ContniuesHSI isn't very popular on this platform as i rarely use to get 100 views on my posts but last week post was close to 500 so many of you were checking back as i was updating in the comment section during the week. I will post once on the weekend from now on and update in the comment section during the week as things develop.
Couple of things i want to put forward. I only trade HSI and there is rarely a day when i don't trade but i can't tell you every trade where to enter or exit. I am just sharing with you what i see in the market at that particular moment. How you trade that is entirely up to you. Please don't ask me where is the bottom/top or i bought here, sold here, will market go up or down. I don't know. You don't have to know any of it to trade. Every moment in market just like each individual is unique. You yourself have to come up with a strategy which best suits your personality. I am just giving you a second opinion.
Coming back to HSI, price spent majority of the week zigzagging between 24500-200. Thursday close looked really convincing for a gap down on Friday morning but it open up instead and concluded the week on a dull note. What it tells me is that they are not done here yet.
Looking at the close, it appears that gap down and selloff on Monday is less likely. If Market goes back up to the selling zone 24700-800, it will offer a good opportunity to short. More often than not, price will go below the accumulation range in a trap move before reversing. Therefore, it is best to wait till it goes down to 23900 or possibly even below 23500 before deciding to go Long.
During the accumulation, down moves are sharp whereas up moves appear laboured. Market has to look weak for dumb money to be on the short side in order for smart money to accumulate, vice versa during distribution. Having said that, i also believe that being on the short side until the very end of accumulation is the right way to trade as long as you are selling from the top of the accumulation range and taking profits in the middle or near the bottom. Do not expect every trade to be a big winner. Market spends vast majority of time range bound. Knowing when market is in the range and when it is about to trend requires understanding of market structure which can only come with time, discipline, dedication and perseverance.
Ideas, suggestions, questions are welcome.
Regards
Insight into the thought processAs i am getting a lot of questions, i decided to present the thought process of my recent analysis. I hv very little PC knowledge so i can't present analysis in a very professional way. If you have any question, i will be glad to help.
Monday to Gap down?Will we see an opening gap on Monday to the downside?
It's all setup really nicely. If it does, i don't expect it to get filled anytime soon. Move down should accelerate from there onward.
ATM, i see very little bullish case to support the idea of Gap or the parallel channel acting as a support for another rally.
Resistance now at 24750-850.
Post Fed. HSI Super BearishRallied briefly but as anticipated it was short lived and sold off from first resistance. We now have an inside day fake out on dailies and are very close to the key levels 24300-500. Acceleration gap through there will signal the start of mark down. With the amount of distribution, 20k should be minimum but its not just the last 3 months. It has been going on since late 2017(refer to my 23 May post, linked below).
If you are short, hold onto this one. It can be very big.
Monday's opening will have a lot to say
Gap through 24500 and there will be no looking back. No Gap may provide great opportunity to go short around 26k.
Coming Down NicelyAfter the Buying Climax on 7th of July, brief distribution was carried out between 25950-26250.
Today saw a gap down and a selloff to first of the 4 unfilled gaps below which is acting as a support for time being.
Key resistance above now is 25850-950.
Move down so far appears to be in a channel formation.
Major chunk of distribution took place between 24500-300 since the low in March. Gap through that will signal the start of a markdown and accelerated move towards 20k and below.
Regards
Buying Climax and a Top?
Zigzagged with huge volume(see above) at the open, took out the stops above the very important level marked in Yesterday's post and has since been on the decline. We will know for sure in next few sessions but there is a good chance that Today marks the start of a significant decline which will take HSI to 20k and below if my analysis of distribution near the 24k level are correct.
First significant support is the gap at 25250-500. It can get real ugly in no time so trade carefully.
Update: SELL SELL SELL!!!
More on the post earlier Today.
HSI now has rallied beyond the point which i have marked for few weeks as the potential turning point. We may see brief distribution between 25950-26250 for couple of sessions and then move lower. I am to remain short until it breaks above 26800.
I am of a view that the rally so far this month after the passing of controversial security law is to trap the investors who were on the sidelines waiting to see how the market perceives the new law.
There is 10 weeks of distribution near 24k. If it reverses, 20k may come in no time.
Breaking up with HUGE VolumeToday saw a huge surge in volume in the morning hour. Double the usual.
Next few days are critical.
From a bullish POV, HSI is now breaking out of a 10 week range with a high volume but to predict whether it truly is a break to the top or a trap, it is important to know what happened within the range and how the market approached the breakout.
To my understanding, it was distribution(as i have been pointing out in my previous posts) and there is very little left in it.
2 possible scenarios to top out are as drawn on the chart. Triangle(Blue). Ending Diagonal(Orange).
Regards
