NEW YORK (TheStreet) -- 2015 has been a relatively dull year so far for U.S. equities, at least compared to the previous three years. Most of the index averages have been range-bound, consolidating sideways since January with a slight upward bias. This is in stark contrast to the rest of the world, with the majority of international indexes experiencing double digit percentage gains this year. One of the better performing markets in 2015 has been Hong Kong's Hang Seng index, which has rallied over 16% since January.
Despite the already respectable gains so far this year in the Hang Seng, technical analysis suggests that more upside is still in store. Price has been consolidating sideways since the high of the year was made in April, forming a bull flag which is often a continuation pattern. This action should lead to at least one more push higher before a potential top becomes more likely.
Before reaching new highs though, the Hang Seng should see more near-term downside, or at least another week or two of sideways, rang-bound price action. If price breaks below the May low, it should find support between 26,990 and 26,325 to complete the pullback off the April top, turning back up to a new swing high soon after. Otherwise, if price manages to continue holding the May low, it should continue pushing sideways until mid-June, oscillating between the May-high and May-low before breaking out.
Once the Hang Seng does breakout to a new high on the year, it should continue toward between 29,265 and 30,475 before putting in a more significant top. After this next move up, there is a high probability that price will begin a multi-month correction, retracing the majority if not all of the prior gains seen this so far this year.