Data as of 17 Dec 2024
A Bollinger Band’s upper band (Resistance) is 2 standard deviations from its 20-day Moving Average. Its lower band (Support) is 2 standard deviations from its 20-day Simple Moving Average.
In the Bollinger Band chart below, the Hang Seng Index’s Support is 18986 and the Resistance is 20471.

Our Models
After running though our arsenal of tools, our models are fitted to a flexible non-parametric unbounded Metalog Distribution as shown below.

About Metalog Distributions
Metalog Distributions are a new class of Distributions invented to overcome the flaws of classical Distributions. Instead of trying very hard to choose a Distribution (And there are more than a dozen common types) which you think approximates your data, Metalog are non-parametric, flexible and unbounded. The Metalog will adapt to the shape pf your data.
They are especially useful of financial markets data which are noisy, with Distributions that exhibit long fat tails, high degrees of skewness and narrow multi-peaks. Assuming they have a Normal (Bell Curve) Distribution is not realistic-even after preprocessing and normalizing them with tools like ARIMA and Z-Score.
Our Support and Resistance is derived from the table of the Metalog Distribution’s statistical properties below. Support (S) is defined as the 5% Quantile and Resistance® as the 95% Quantile. S= 19675 and R=20685.

Comparison
Bollinger Band: S= 18986; R=20471
Metalog: S= 19675; R=20685
Conclusion
Bollinger Bands assume the data has a Normal Distribution and the inter-relationship between Open, High, Low, and Close prices are linear. This is not a realistic assumption in the case of noisy financial markets data. Thus, we believe our models’ output of Support and Resistance is more accurate.
The tighter trading and of our models, with the Support at a higher level than than Bollinger Band's Support can be interpreted two ways: (1) if you already hold positions in HSI e.g through an ETF and have negative returns, Support=Cut Loss. (2)If you do not yet hold a position Support=Buy In. This is because the 1-20 steps ahead Forecast Trend for HSI is positive: See below.

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