Hong Kong: HANG SENG INDEX (.HSI) – Asian shares drop as virus fears grip markets again
Asian shares slipped Friday as fears about the virus outbreak once again dominated financial markets.
Japan’s benchmark Nikkei dived 3.1% to 20,663.32. Australia’s S&P/ASX 200 lost 2.1% to 6,259.20. South Korea’s Kospi dropped 2.3% to 2,037.08. Hong Kong’s Hang Seng declined 2.1% to 26,213.51, while the Shanghai Composite slumped 0.9% to 3,049.95. Shares also dropped in Taiwan and Southeast Asia.
Markets have endured roller coaster ups and downs for weeks amid uncertainty over how much damage the outbreak of the new coronavirus will do to the global economy.
In China, where the virus outbreak has been steadying, stocks trading in Shanghai have rallied nearly 12% since scraping bottom on Feb. 3. Factories there are gradually reopening, and a return to a sense of normal life may even be on the horizon following swift and severe actions by the government to corral the new form of coronavirus.
But elsewhere in the world, the mood is darker. There are about 17 times as many new infections outside China as in it, according to the World Health Organization.
In the U.S., the death toll climbed to 12 due to the virus. California declared a statewide emergency, Facebook is temporarily closing a Seattle office after a worker was diagnosed with the virus and an industry group said the outbreak could cost airlines as much as $113 billion in lost revenue.
The S&P 500 fell 3.4% to 3,023.94. It’s now 10.7% below the record high it set on Feb. 19. The Dow Jones Industrial Average slumped 3.6% to 26,121.28 and the Nasdaq lost 3.1%, to 8,738.60.
Losses were widespread, and energy stocks in the S&P 500 dropped to their lowest level since March 2009, when they were emerging from the financial crisis.
Travel-related companies fell again on worries that frightened customers won’t want to confine themselves in planes or boats with others. Royal Caribbean Cruises sank 16.3%, Carnival fell 14.1% and American Airlines Group lost 13.4%.
U.S. congressional leaders reached a deal on an $8.3 billion bill to battle the outbreak, which the Senate passed Thursday, and the Bank of Canada followed up on the Federal Reserve’s surprise cut to interest rates the day before with its own.
Some economists expect the European Central Bank to take action to support markets before its meeting on March 12.
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 27,130.54.
The projected upper bound is: 27,107.39.
The projected lower bound is: 25,116.96.
The projected closing price is: 26,112.18.
A black body occurred (because prices closed lower 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 26 white candles and 24 black candles for a net of 2 white candles.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 45.8109. This is not an overbought or oversold reading. The last signal was a buy 6 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 37.85. 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 43 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 -85. This is not a topping or bottoming area. The last signal was a buy 3 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 9 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed down -621.199 at 26,146.670. Volume was 59% above average (neutral) and Bollinger Bands were 15% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 26,503.23 27,616.00 27,171.16
Volatility: 26 23 20
Volume: 2,277,390,592 1,763,054,208 1,658,415,104
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.
HANG SENG INDEX is currently 3.8% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .HSI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .HSI and have had this outlook for the last 27 periods.
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