Hang Seng says get out?

Click on chart for larger image

If the Hang Seng Index breaks below 21,030 by at east 3% it will most likely signal the beginning of the end of the Bear Market Rally which commenced last March, 2009.

The countertrend rally from March appears to be building a Head and Shoulders pattern of late.

If it breaks below the Neckline indicated by the red arrow, then a small Pullback rally should eventuate, after which - watch out below.

The H&S pattern may not be completed, of course. However some traders would have started selling - just in case - after January 11th 2010 when the price failed to push above the upper orange line connecting the two upper Shoulder tops.

Caution is certainly on the cards.

James Leo Donoghue