The selloff in Hong Kong intensified today with HSI losing a massive -1105 pts or -4.22%. The crush on tech continued with Chinese stocks like Meituan and Alibaba down -12.7% and -5.5% respectively. The Shanghai SSE also dropped -2.49%. Negative sentiment is spreading into European session, with major indexes down around -1% in initial trading.
The HSI is now standing at an important support level around 25000 handle a 61.8% retracement of 21139.26 to 31183.35 at 24976.10. Some support might be seen here on oversold condition. But prospect of a strong rebound is limited. The development this week suggests that whole rise from 21139.26 has completed with three waves up to 31183.35 as a corrective move. Fall from there is at best a leg inside a medium term side way pattern, and at worst a the third of the long term pattern from 33484.07. In the latter case, HSI could target 21139.26 and below. We’ll see how it goes.
