Hong Kong: HANG SENG INDEX (.HSI) Despite The Noise, Deal May Be Close
The major Asia Pacific stock indexes finished mostly higher on Friday following days of two-sided trading tied to the ever-changing narrative over a U.S.-China trade deal. If you’re keeping score, the negative days were primarily driven by comments from “unnamed sources”, “people close to negotiations” and “a source close to the Trump administration.” The positive days were fueled by remarks from U.S. and China with real names. Imagine that.
On Friday, Japan’s Nikkei 225 Index settled at 23112.88, up 74.30 or +0.32%. Hong Kong’s Hang Seng Index is trading 26541.36, up 74.48 or +0.28% and South Korea’s KOSPI Index finished at 2101.96, up 5.36 or +0.26%.
China’s Shanghai Index settled at 2885.29, down 18.35 or -0.63% and Australia’s S&P/ASX 200 Index closed at 6709.80, up 36.90 or +0.55%.
Positive Developments Outweigh Negative Headlines
Despite Friday’s better performance, gains are being capped by persistent worries over the status of trade negotiations between China and the United States.
Over the past 48 hours, stocks have been subject to bearish headlines saying trade talks have hit a snag over the rollback of tariffs. Some have said the trade deal will be delayed until early 2020. Others are worried that U.S. legislation on Hong Kong will undermine trade talks between the world’s two largest economies.
There have been positive developments too. China said it was willing to work with the United States to resolve core trade concerns. Additionally, The Wall Street Journal reported that China has invited top U.S. trade negotiators for a new round of face-to-face talks in Beijing.
Despite The Noise, Deal May Be Close
Last week ended on a positive note with White House economic advisor Larry Kudlow saying the United States and China are getting close to a trade agreement.
“We’re getting close,” he told an event at the Council on Foreign Relations in Washington. “The mood music is pretty good, and that has not always been so in these things.”
“It’s not done yet, but there has been very good progress and the talks have been very constructive,” Kudlow told the event.
On Thursday, the South China Morning Post said both countries are on the “doorstep” of reaching a deal, citing a source close to the Trump administration.
Last week, a deal was “close”. This week it’s on the “doorstep” of being reached. It seems everything in between was just a bunch of “noise”.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 27,330.05.
The projected lower bound is: 25,837.55.
The projected closing price is: 26,583.80.
A white body occurred (because prices closed higher 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 23 white candles and 27 black candles for a net of 4 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 46.1897. This is not an overbought or oversold reading. The last signal was a buy 3 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 46.66. 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 10 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 -60. This is not a topping or bottoming area. The last signal was a buy 4 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 7 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 128.199 at 26,595.080. Volume was 32% below average (neutral) and Bollinger Bands were 11% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 26,694.01 26,652.63 27,723.42
Volatility: 25 18 19
Volume: 1,477,500,928 1,516,177,536 1,756,400,256
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 4.1% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 1 periods.
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