Asian markets trade broadly higher today, following the strong rebound in US stocks on Friday. Hong Kong HSI is additionally lifted by news of easing pandemic restrictions in Shanghai. China’s industrial profit dropped -6.5% yoy in May, improved from April’s -8.5% yoy.
Technically, HSI breaks 22523.64 resistance (April’s high) to resume the rebound from 18235.48. Further rally is in favor as the index is moving away from 55 day EMA, with daily MACD back above signal line. Real test for the near term lies in 38.2% retracement of 31183.35 to 18235.48 at 23181.56. Sustained break there should confirm medium term bottoming and set the stage for stronger rebound to 61.8% retracement at 26237.26, even as a corrective move.
