Hang Seng Index: Larger Bullish Cycles
Elliott Wave Forecast | May 23, 2018 11:09AM ET
Firstly the Hang Seng index larger bullish cycles have been trending higher with other world indices. In April 2003 it put in a huge degree pullback low. From there the index rallied with other world indices again until October 2007. It then corrected the rally as did most other world stock indices. It ended this larger degree correction in October 2008. From those 2008 lows, the index shows a 5 swing sequence that favors further upside. Price has reached and exceeded the area of 29410 – 32040 which is the .618 – .764 Fibonacci extension of the 2008 to 2015 cycle.
The way this is measured is as follows. Use a Fibonacci extension tool on a charting platform. Point 1 will be at the beginning of the cycle at the 2008 lows. From there on up to the 2015 highs will be point 2. The point 3 will be down at the 2016 lows. As previously mentioned, the index in January 2018 saw the .618 – .764 Fibonacci extension of the 2008 to 2015 cycle. In most cases a fifth swing will end in this Fibonacci extension area however this index has been a bit more bullish. Analysis continues below the chart.
In conclusion. Currently the Hang Seng pullback from the 5th swing high ended the cycle up from the 2016 lows. It did a 3 swing pullback to the February 2018 lows to complete the 6th swing. At this point it is favored to remain above there during dips. Worst case if it remains below the January 2018 highs it can continue a pullback in the 6th swing in 3 more swings. This would make a possible 7, or 11 swings to correct the cycle up from the 2016 low which should be similar to the 2nd swing pullback of 2011. Afterward of completion of the 6th swing pullback it should see more upside in the 7th swing toward 36314.
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