The Hong Kong stock market index has broken an uptrend going back decades. The Hang Seng Index (Index) is a "freefloat-adjusted market-capitalization-weighted stock-market index" and it is the main indicator of the overall market performance in Hong Kong. It was started in 1969 and comprises 64 companies.
(For more, see The $18 Trillion Question for Hong Kong and Chinese Stocks.)
In this monthly line chart of the Index, below, we can see that it has broken an uptrend going back to the mid-1980's. The pattern of higher lows and higher highs was broken this year when the low of 2020 was broken. Prices are trading below the declining 40-week moving average line.
In this daily Point and Figure chart of the Hang Seng Index, below, we used weekly price data and a five box reversal filter. Here the software shows us a very bearish price target of 2,630.
Bottom line strategy: Many market observers have commented recently that they are worried that the European economies are vulnerable to a slow down. For me, the risk has been a slowing of the global growth engine of China. You do not want to ignore the breaking of such a long-term trend.
