Hong Kong: HANG SENG INDEX (.HSI) bounces back despite coronavirus fears

Hong Kong: HANG SENG INDEX (.HSI) bounces back despite coronavirus fears

Hong Kong: HANG SENG INDEX (.HSI) bounces back despite coronavirus fears

Hong Kong stocks ended on Tuesday with gains, recovering after a jittery start to the week but investors remained cautious about the economic impact of the coronavirus outbreak on the economy.

The Hang Seng Index rose 1.3 percent, to close at 27,583.

On the mainland, the Shanghai Composite Index rose 0.4 percent, to close at 2,901. The Shenzhen Composite Index ended up flat, at 1,757.

Most other Asian markets rebounded spurred by fresh Wall Street records while Markets in Tokyo were closed for a public holiday.

Sydney climbed 0.6 percent and Singapore rose 0.5 percent. Seoul jumped 1.0 percent and Taipei rose 0.8 percent, while Wellington was up 1.1 percent.

The market focus will now shift to earnings reports expected this week, including from companies that could see a coronavirus hit.

Chinese tech giant Alibaba, Japanese automaker Nissan and MGM Resorts are among the firms scheduled to announce results on Thursday.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 28,553.45.

The projected lower bound is: 26,641.11.

The projected closing price is: 27,597.28.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 8 rising windows in the last 50 candles–this makes the current rising window even more bullish.

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 81.6792. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 4 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 50.35. 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 25 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 38. This is not a topping or bottoming area. 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 342.541 at 27,583.881. Volume was 20% above average (neutral) and Bollinger Bands were 86% wider than normal.

Open     High      Low     Close     Volume___
27,514.25027,674.81127,436.99027,583.8811,868,625,408
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 26,946.53 27,586.20 27,355.73
Volatility: 31 22 20
Volume: 2,091,700,352 1,596,843,008 1,666,940,032

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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
HANG SENG INDEX is currently 0.8% above 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 9 periods.

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