Hong Kong: HANG SENG INDEX (.HSI) brace for possible wild ride

Hong Kong: HANG SENG INDEX (.HSI) brace for possible wild ride

Hong Kong: HANG SENG INDEX (.HSI) brace for possible wild ride

Hong Kong traders are bracing themselves for what could be a wild session when trading resumes Thursday, following days of drama building out of the US that sparked a bloodbath on Wall Street and in Tokyo.

The Hong Kong market has been closed since Monday noon for the Christmas holiday, when it ended slightly down. When US markets opened on Monday US time, the S&P 500 Index plunged 2.7 per cent to close on the brink of entering a bear market – the market’s worst Christmas Eve trading day in history.

US traders fled as President Donald Trump ratcheted up his criticism of US Federal Reserve Chairman Jerome Powell for raising interest rates too fast and tweeted that the Fed is “the only problem” in the US economy. Meanwhile, media reports suggested that a furious Trump had discussed firing Powell, his nominee for the position.

In addition, US Treasury Secretary Steven Mnuchin’s attempt to raise confidence in tumultuous markets by calling the heads of the six largest US banks over the weekend spooked investors. A partial shutdown of the US government triggered by a stand-off between Trump and Congress over funding for a border wall added more gloom to the markets.

The Hang Seng closed at 25,651 on Monday, down by 0.4 per cent, and several analysts said they expect it could move toward testing the 25,000 level when it reopens Thursday.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 26,721.61.

The projected lower bound is: 24,575.15.

The projected closing price is: 25,648.38.

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 25 white candles and 25 black candles.

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 39.1419. 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 43.35. 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 buy 50 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 -102.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 8 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 INDEX closed down -102.039 at 25,651.381. Volume was 39% below average (neutral) and Bollinger Bands were 13% narrower than normal.

Open High Low Close Volume___
25,515.40025,651.38125,421.43025,651.3811,107,340,288

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

Moving Averages: 10-period 50-period 200-period
Close: 25,937.35 25,903.04 28,355.45
Volatility: 18 26 23
Volume: 1,475,576,576 1,745,599,488 1,885,011,968

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 9.5% below its 200-period moving average and is in an downward trend. Volatility is low 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 4 periods.

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