Last Friday, the Hang Seng opened at 14530.83, 200 points higher than Thursday’s big sell off. The index was able to go up even further to as high as 14673.60 but it was sold down later by profit takers at 14,297.41, ending largely unchanged from Thursday closing down 38.47 points or 0.27% at 14377.44.

The HK market behaved as predicted.  It paused, consolidated and flattened out resting above its 32-day moving average. The RSI sorted itself out and looks ready for another rally if US market indices moved higher over the weekend.

Recommendation:  Buy a few shares to prepare for a rally as the trend line is still intact.  Resistance is first seen at previous high of 15,800 but may extend higher to 17,000.