Hong Kong: HANG SENG INDEX (.HSI) closed at a four-month low as Beijing stepped up its rhetoric amid a festering trade dispute with Washington

Hong Kong: HANG SENG INDEX (.HSI) closed at a four-month low as Beijing stepped up its rhetoric amid a festering trade dispute with Washington

Hong Kong: HANG SENG INDEX (.HSI) closed at a four-month low as Beijing stepped up its rhetoric amid a festering trade dispute with Washington

Hong Kong stocks on Thursday closed at a four-month low as Beijing stepped up its rhetoric amid a festering trade dispute with Washington.

The Hang Seng index ended down 0.4% at 27,114.88 points, its lowest closing level since January 24, while the China Enterprises Index closed up 0.6% at 10,450.09 points.

Provoking trade disputes is “naked economic terrorism”, a senior Chinese diplomat said on Thursday, ramping up the rhetoric against the United States amid a bitter trade war that isn’t showing any signs of ending soon.

“This kind of deliberately provoking trade disputes is naked economic terrorism, economic chauvinism, economic bullying,” China’s Vice Foreign Minster Zhang Hanhui said.

His comments came after Chinese newspapers reported that Beijing could use rare earths to strike back at Washington after U.S. President Donald Trump remarked he was “not yet ready” to make a deal with China over trade. 

About 1.94 billion Hang Seng index shares were traded, roughly 108.7% of the market’s 30-day moving average of 1.79 billion shares a day. The volume traded in the previous trading session was 2.31 billion.

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 28,228.29.

The projected upper bound is: 27,892.44.

The projected lower bound is: 26,267.86.

The projected closing price is: 27,080.15.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white 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 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 31.6511. This is not an overbought or oversold reading. The last signal was a buy 2 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 27.83. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 2 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 2 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 27 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed down -120.830 at 27,114.881. Volume was 1% below average (neutral) and Bollinger Bands were 78% wider than normal.

Open High Low Close Volume___
27,319.25027,319.25027,020.73027,114.8811,942,290,944

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

Moving Averages: 10-period 50-period 200-period
Close: 27,474.78 29,013.45 27,473.44
Volatility: 11 18 22
Volume: 2,107,521,792 2,025,977,984 1,861,623,936

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 1.3% 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 16 periods. Our momentum oscillator is currently indicating that .HSI is currently in an oversold condition. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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