Hong Kong: HANG SENG INDEX (.HSI) awaiting Fed meeting

Hong Kong: HANG SENG INDEX (.HSI) awaiting Fed meeting

Hong Kong: HANG SENG INDEX (.HSI) awaiting Fed meeting

Shares in Asia mostly traded lower on Tuesday afternoon, ahead of a closely watched meeting by the U.S. Federal Reserve set to kick off later in the day stateside.

Mainland Chinese shares ended the morning session mostly lower, with the Shanghai composite slipping 0.22 percent and the Shenzhen component declining 0.106 percent. The Shenzhen composite was largely flat.

In Hong Kong, the Hang Seng index slipped 0.25 percent as shares Chinese tech behemoth Tencent declined 0.49 percent.

Amid the day’s declines, one investor said he was “a bit cautious right now.”

“It appears that … risk assets have moved ahead of fundamentals,” Daryl Liew, head of portfolio management at REYL Singapore, told CNBC’s “Street Signs” on Tuesday. “If you look at … the sharp run up in equity markets year to date, it’s come against a backdrop of actually slowing economic numbers.”

Fed meeting on Tuesday

Overnight on Wall Street, the Dow Jones Industrial Average capped a four-session winning streak as it closed 65.23 points higher at 25,914.10. The S&P 500 finished its trading day 0.4 percent higher at 2,832.94, while the Nasdaq Composite also added 0.3 percent to close at 7,714.48.

The moves came ahead of a two-day monetary policy meeting by the Fed, set to begin on Tuesday. Market expectations for a rate hike are at zero, according to the CME Group’s FedWatch tool. However, investors will look for clues about the central bank’s economic outlook. The Fed had signaled it will be “patient” in raising rates at its previous meeting this year.

The U.S. dollar index, which tracks the greenback against a basket of its peers, stood at 96.408 after touching highs around 96.6 yesterday.

The Japanese yen traded at 111.24 against the dollar after seeing lows around 111.6 in the previous session.

Oil prices continued rising this week, supported by the prospect of prolonged OPEC-led supply curbs. Prices were mixed in the afternoon of Asian trading hours, with the international benchmark Brent crude futures contract rising 0.15 percent to $67.64 per barrel and U.S. crude futures flat at $59.09 per barrel.

Overall, the bias in prices is: Upwards.

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

The projected upper bound is: 30,247.32.

The projected lower bound is: 28,776.60.

The projected closing price is: 29,511.96.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 33 white candles and 17 black candles for a net of 16 white candles.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

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 89.7565. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 5 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 66.50. 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 15 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 179.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 5 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 0 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 15.740 at 29,424.750. Volume was 22% below average (neutral) and Bollinger Bands were 42% narrower than normal.

Open High Low Close Volume___
29,419.14129,486.15029,319.51029,424.7501,356,508,672

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

Moving Averages: 10-period 50-period 200-period
Close: 28,897.45 27,916.76 27,528.99
Volatility: 19 17 23
Volume: 1,816,807,808 1,877,118,976 1,863,964,416

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 6.9% 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 43 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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