Fundamental Overview
The Chinese Politburo announced that it will adopt a “moderately loose” strategy for monetary policy for 2025, which marked the first major shift in stance since 2011.
Moreover, the language around fiscal policy was stepped up to “more proactive” from just “proactive” in another sign that Chinese officials intend to ease policies more forcefully to prop up the economy.
The market will now expect big rate cuts and asset buying, which should support the stock market going forward.
Hang Seng Index Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Hang Seng broke above a downward trendline that was defining the bearish momentum on this timeframe. The buyers piled in on the news and will target a new cycle high. The sellers, on the other hand, will want to see the momentum failing and the price dropping back below the 19731 level to target the 18203 level next.
Hang Seng Index Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have now a minor upward trendline defining the bullish momentum on this timeframe. If we were to get a pullback into it, we can expect the buyers to lean on the trendline to position for a rally into the 21342 level next. The sellers, on the other hand, will look for a break lower to start positioning for a drop into the 18203 level.
Hang Seng Index Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price rallied above the top of the average daily range for today already as the buyers piled in aggressively on the news. In fact, when there are such big surprises, the price can run a lot. The best moment to enter the market was of course on the news as the bullish momentum might now increase and not provide any technical entry. We might see new highs during the Asian session.
