HANG SENG: How to trade a classic Elliott Wave pattern & forecast

  Jason Parker    
  Asian Indices
Traders that follow and trade using our published signals could have retired long ago!

For those who have not yet managed to implement any signals, or are just now joining us, we take it a step forward and update the Hang Seng signal with a complex pattern which not everyone can predict.

The Elliott Wave Theory (also known as the Elliot Wave Principle) was originally developed by Ralph Nelson Elliott during the 1930s, as a tool to predict fluctuations in stock market prices. Over time, the theory has been applied in other markets, primarily in the foreign exchange market and, of course, its fits well in very liquid markets such as Hang Seng Index.

We have applied the classic Elliot Wave Principle, which is comprised of five impulsive/pushing waves and three corrective waves, on the Hang Seng Index in the above chart.

The Classic Elliott Wave pattern of 5 waves identifies for us the path for the Hang Seng, which will stop the fall at the support line, located below 19237 points. After that, the Hang Seng will climb and pull back to close the open gap, located at 20440.

This line would serve as a resistance line and will push the movement down to the last bottom, which is located near the 9237 points mark.

Stay Tuned!