Hong Kong: HANG SENG INDEX (.HSI) bumpy ride this week
Hong Kong stocks dropped for a fifth straight week bringing the total loss for the period to 12.1 per cent, amid fears about the trade war and a downturn in the US market.
There was some relief for mainland markets, which bounced back this week after the government introduced support measures.
Hong Kong’s benchmark Hang Seng Index closed on Friday at a fresh 18-month low 24,717.63, down 276.83 points, or 1.11 per cent. It finished the week with a 3.3 per cent decline.
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 27,049.30.
The projected upper bound is: 25,717.29.
The projected lower bound is: 23,596.56.
The projected closing price is: 24,656.93.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with HANG SENG INDEX), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 14.3829. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 9 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 31.61. 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 9 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 -147.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 7 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 15 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed down -276.830 at 24,717.631. Volume was 9% below average (neutral) and Bollinger Bands were 50% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 25,418.63 26,902.83 29,462.54
Volatility: 29 25 23
Volume: 1,950,469,888 1,904,346,752 2,153,378,816
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 16.1% 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 moderate flows of volume out of .HSI (mildly bearish). Our trend forecasting oscillators are currently bearish on .HSI and have had this outlook for the last 15 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.