Hong Kong: HANG SENG CHINA ENTERPRISES IND (.HSCE) stocks fall to near 7-month low as yuan’s slide adds to China growth fears

Hong Kong: HANG SENG CHINA ENTERPRISES IND (.HSCE) stocks fall to near 7-month low as yuan’s slide adds to China growth fears

Hong Kong: HANG SENG CHINA ENTERPRISES IND (.HSCE) stocks fall to near 7-month low as yuan’s slide adds to China growth fears

China Enterprises index HSCE rises 0.1 pct

Hong Kong shares rose slightly on Tuesday, with sentiment aided by a private survey showing China’s services sector expanded at a steady pace in May. ** The Hang Seng index rose 0.3 percent, to 31,093.45, while the China Enterprises Index gained 0.1 percent, to 12,259.32 points.

China’s services sector expanded at a solid pace last month, with companies accelerating hiring on the back of the strongest optimism for future growth in 11 months, the survey showed.

The sub-index of Hang Seng tracking energy shares dipped 1.2 percent, while the IT sector rose 1.21 percent, the financial sector was 0.19 percent higher and property sector rose 1.13 percent.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 11,707.83.

The projected upper bound is: 11,306.62.

The projected lower bound is: 10,393.22.

The projected closing price is: 10,849.92.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold (which appears to be the case with HANG SENG C E I) to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.

A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend (which appears to be the case with HANG SENG C E I) it is called a bullish hammer.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 37.4615. This is not an overbought or oversold reading. The last signal was a buy 1 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 27.85. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 1 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -110.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 1 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 11 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG C E I closed down -200.800 at 10,872.200. Volume was 64% above average (neutral) and Bollinger Bands were 100% wider than normal.

Open High Low Close Volume___
10,844.17010,887.10010,620.50010,872.2004,098,198,528

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 11,172.37 11,956.52 11,966.09
Volatility: 26 24 26
Volume: 3,208,374,784 2,453,226,752 2,572,282,368

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

HANG SENG C E I is currently 9.1% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of .HSCE (mildly bearish). Our trend forecasting oscillators are currently bearish on .HSCE and have had this outlook for the last 11 periods. Our momentum oscillator is currently indicating that .HSCE is currently in an oversold condition.

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