Hong Kong: HANG SENG INDEX (.HSI) economic worries cap gains

Hong Kong: HANG SENG INDEX (.HSI) economic worries cap gains

Hong Kong: HANG SENG INDEX (.HSI) economic worries cap gains

Stocks in Hong Kong ended higher on Tuesday, gaining a footing after recent losses, although data showing cooling factory-gate inflation in China for a third straight month in September and a warning from S&P on government debt curbed further gains.

*The Hang Seng index ended 0.1 percent higher at 25,462.26 points, while the China Enterprises Index closed 0.5 percent higher at 10,198.33 points.

China’s factory-gate inflation cooled for a third straight month in September amid ebbing domestic demand, pointing to more pressure on the world’s second-biggest economy as it remains locked in an intensifying trade war with the United States.

Adding to worries was an S&P Global Ratings report that said off-balance-sheet borrowings by Chinese local governments could be as high as 40 trillion yuan ($5.78 trillion) and amount to “a debt iceberg with titanic credit risks”.

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 27,353.38.

The projected upper bound is: 26,433.07.

The projected lower bound is: 24,402.89.

The projected closing price is: 25,417.98.

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 21 white candles and 29 black candles for a net of 8 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 30.7063. 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 33.41. 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 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 -98. This is not a topping or bottoming area. The last signal was a buy 0 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 8 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 17.199 at 25,462.260. Volume was 21% below average (neutral) and Bollinger Bands were 58% wider than normal.

Open High Low Close Volume___
25,586.16025,712.13125,266.53925,462.2601,512,630,528

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

Moving Averages: 10-period 50-period 200-period
Close: 26,083.14 27,295.10 29,622.17
Volatility: 27 24 23
Volume: 1,952,224,256 1,833,845,760 2,143,557,888

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 14.0% 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 8 periods.

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