The daily chart of the Hang Seng Index shows a clear bullish trend. Orange wave 1 is now forming within navy blue wave 3, marking the end of navy blue wave 2's correction. This setup often signals the start of a strong upward movement.

Wave structure and momentum

Navy blue wave 2 appears complete, and orange wave 1 is in progress. This impulsive wave reflects solid buying strength. The current setup shows potential for a strong continuation higher. Traders should monitor the 19215 level as a critical invalidation point.

Investment outlook

This structure gives investors a useful framework. The Hang Seng Index is likely in the early stages of a rally. Orange wave 2, a correction, is expected after this initial move completes. Monitoring trend strength and corrections will help manage positions effectively.

Strategy note

Traders should watch for signs of wave one completion and be ready for a pullback. Despite early signs of strength, wave one always leads to a correction. Proper risk management is important at this early point in the bullish phase.

Hang Seng Index Wave technical analysis

Function: Bullish Trend.

Mode: Impulsive.

Structure Navy Blue Wave 3.

Position: Gray Wave 1.

Direction next higher degrees: Navy Blue Wave 3 (started).

Details: Navy blue wave 2 seems complete; navy blue wave 3 is now underway.

Wave cancel invalid level: 19215.

Market overview

The weekly chart for the Hang Seng Index presents a bullish trend with strong upward signals. The structure shows navy blue wave 3 forming after the end of navy blue wave 2’s correction. This part of the cycle is usually the strongest in an Elliott Wave impulse.

Wave analysis and outlook

Navy blue wave 2 has likely ended, and wave 3 has started. Strong buying interest is visible. The structure inside gray wave 1 confirms this could be a major upward phase. Traders can expect extended movement unless invalidated by a drop below 19215.

Investment framework

This setup offers a strategic roadmap. The Hang Seng may be entering a high-reward phase. Weekly analysis suggests further gains, but corrections are always part of wave cycles. Keeping an eye on trend indicators is crucial.

Positioning advice

Traders should look for confirmation signals while setting clear risk limits. Although the setup is strong, wave three eventually faces a pullback. Using the 19215 level helps with managing trade risk during this bullish stretch.

Hang Seng Index technical Elliott Wave analysis [Video]

Author

Peter Mathers

TradingLounge

Peter Mathers started actively trading in 1982. He began his career at Hoei and Shoin, a Japanese futures trading company.

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