Hang Seng Index Short-Term: Bullish Cup & Handle Formation?

I may be a little early in calling this, but the recent price action has been persistent. HSI has been bearish for a while, but what troubled me right from the start, was the first wave down from the highs - a very clear 3-wave drop (W). Followed by what look like two more 3-wavers up and down (X & Y). A possible complex correction.

At the time of my last post, Hang Seng Index: Serious Resistance Ahead, we were approaching 20750. Subsequently, the market dropped to 19900 level, turned around and hit the resistance line again, generating an inverse Head & Shoulders pattern. However, as the market is short-term overbought, there was no breakout. I'm expecting a sideways movement before any break of the resistance line - possibly resulting in a cup & handle formation.

If my medium-term bullish scenario for Shanghai materialises, a breakout in Hang Seng would fit in nicely with D wave of  the Shanghai Triangle.

Target & Levels to watch

A breakout requires a convincing break above 20750. If it does so, looking at a target of 22000. The path will not be straight up of course .

On the other hand, we may just turn down from here, in which case support is around 19400. A break below will take us much lower.

Very Short-Term

For the next couple of days, expecting a sideways-to-downwards consolidation, inline with other world markets. Prices moving below 19800 level will make the cup & handle unlikely.

All the best, and your views are appreciated as always.