To The Moon

Hang Seng Tech Index ( $HSTECH(HSTECH)$ ) Technical Analysis

Previous Resistance Turned Support Worked Well

• The pink resistance zone was a key level where price previously struggled to break above.

• After breaking out, price retested this level multiple times, confirming it as support.

• This led to a strong bullish move, with the index gaining over 40% from the breakout point.

Current Market Structure: Previous High Turned Support

• The index recently hit a new high, followed by a pullback to retest the previous breakout level.

• The yellow zone, which was previously resistance, has now acted as support.

• Price is showing a bullish reaction, suggesting buyers are stepping in at this level.

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Using DLCs to Capture Short-Term Moves

• Bullish Setup: If price holds above this support level and rebounds, traders could consider a long DLC to capitalize on the potential upside. ( $HSTECH 5xLongSG261029(CWUW.SI)$ )

• Bearish Setup: If the support level fails, traders can use a short DLC to profit from a further decline. (e.g. $HSTECH 5xShortSG261105(YVRW.SI)$ )

Concept of Resistance Turned Support & Its Importance

What is Resistance Turned Support?

• Resistance is a price level where an asset struggles to move above due to selling pressure.

• Once price breaks above resistance, it signals a shift in market sentiment from bearish to bullish.

• When price retests this level from above and holds, it confirms that previous resistance has now become support.

• This occurs because traders who missed the breakout see the pullback as a buying opportunity, and previous sellers now turn into buyers.

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