Hong Kong: HANG SENG INDEX (.HSI) advancing led by a rally in Chinese markets

Hong Kong: HANG SENG INDEX (.HSI) advancing led by a rally in Chinese markets

Hong Kong: HANG SENG INDEX (.HSI) advancing led by a rally in Chinese markets

World shares advanced Tuesday, led by a rally in Chinese markets. Upbeat home price data from China and encouraging talk from the White House on trade negotiations with Beijing appeared to help lift sentiment.

Germany’s DAX surged 0.6% to 12,096.93 while the CAC 40 in France gained 0.3% to 5,524.92. Britain’s FTSE 100 climbed 0.3% to 7,458.74.

Wall Street looked set for gains with the future contract for the Dow up 0.4% at 26,476.00. That for the S&P 500 advanced 0.4% to 2,919.70.

In Asia, the Shanghai Composite index jumped 2.4% to 3,253.60 and the Hang Seng index in Hong Kong surged 1.1% to 30,129.87.

The Nikkei 225 index added 0.2% to 22,221.66. South Korea’s Kospi gained 0.2% to 2,246.63 and the S&P/ASX 200 in Australia gained 0.4% to 6,277.40. India’s Sensex advanced 1% to 39,281.69. Shares also rose in Taiwan and Southeast Asia.

Traders will be watching for key economic growth data from Beijing on Wednesday.

News that China’s house prices rose in March raised hopes that a slowdown in the all-important property sector may be abating.

Home prices in 70 major cities rose on average, the government reported.

Optimism over prospects for resolving trade conflicts between the U.S. and China has grown.

Larry Kudlow, director of the president’s National Economic Council, told reporters negotiations over complaints that China has predatory technology policies were going “very well” and making good progress.

“We’re not quite there yet. We’ve still got some open issues. Currency reforms look very good, for example, there’s been progress on enforcement. Just pretty much across the board,” he said. “I think the key here is steady conversations, steady conversations since they were here,” Kudlow said, referring to the latest round of talks, which were held in Washington earlier this month.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 28,678.68.

The projected upper bound is: 30,897.13.

The projected lower bound is: 29,462.09.

The projected closing price is: 30,179.61.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with HANG SENG INDEX), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

A piercing line occurred (which indicates that prices moved down on the previous bar, opened even lower, but then closed significantly higher). This implies strength as the momentum appears to be shifting from the bears to the bulls. Note that the higher the close of the white candle (relative to the black candle), the more bullish the Piercing Line pattern.

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 46.0529. This is not an overbought or oversold reading. The last signal was a sell 3 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 65.18. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 4 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 52. This is not a topping or bottoming area. The last signal was a sell 4 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 buy 9 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 319.148 at 30,129.869. Volume was 42% above average (neutral) and Bollinger Bands were 20% wider than normal.

Open High Low Close Volume___
29,754.30130,142.85929,665.10930,129.8692,624,929,280

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 29,959.14 28,933.33 27,442.09
Volatility: 12 16 22
Volume: 2,054,790,144 1,958,623,360 1,845,639,552

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 INDEX is currently 9.8% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into .HSI (mildly bullish). Our trend forecasting oscillators are currently bullish on .HSI and have had this outlook for the last 9 periods.

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