An Update on $HSBC

My last post on $HSBC was here. In that post, I was looking for a strong rally, and it did, in fact, rally almost 60% from that low that was being put in at that time.

That said, that rally did not bear the hallmarks of a third wave, as it should have gone well into the 40s, but it stopped short. And where it stopped is important, because as it turned out, it stopped at perfectly equal legs. And that implies that the move has been corrective and not impulsive. If it were impulsive, that rally should have been significantly higher and should not have pulled back as it has to overlap what I now label as yellow “a” (in the prior post, that high was pink “1”).

Meaning: despite the strength, the overall trend remains down, and everything from the 2020 low has been a bear market rally on a macro scale.

HSBC

Let’s zoom out.

Everything from the top of the GFC counts well both internally and externally, good fib strikes all around. There are only two fibs available to us below, one at the 23.6% extension of purple “a” from purple “b,” and another at the 38.2%% extension of purple “a” from purple “b.” I suspect this will be a long, multi-year affair. We should move 40% lower to reach cycle (yellow) “a” of purple “c,” and then have a long, perhaps sideways-ish rally for yellow “b,” before having another steep decline for yellow “c” of purple “c.”

HSBC

And after that, if its Hong Kong exposure hasn’t caused it to go bankrupt, buy all of it that you can lol


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