Hong Kong: HANG SENG INDEX (.HSI) Expected to Open Lower

Hong Kong: HANG SENG INDEX (.HSI) Expected to Open Lower

Hong Kong: HANG SENG INDEX (.HSI) Expected to Open Lower

Shares in Hong Kong rebounded on Friday after a global equity market rout saw the Hang Seng index fall 3.5 percent a day earlier, but ongoing concerns about the prospects for global trade and economic growth continue to dampen sentiment.

The Hang Seng index ended 2.1 percent higher at 25,801.49. The China Enterprises Index also gained 2.1 percent to 10,299.09 points. The Hang Seng lost 2.9 percent for the week, its third consecutive weekly loss.

The IT sector rose 5.45 percent, supported by China’s gaming and social media giant Tencent Holdings Ltd .

Tencent shares surged 8 percent, as the firm repurchased shares for a 22nd straight session, but still lost 5.4 percent for the week.   The sub-index of the Hang Seng tracking energy shares rose 1.2 percent, the financial sector was 1.8 percent higher and the property sector climbed 1.23 percent.

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 27,539.89.

The projected upper bound is: 26,786.45.

The projected lower bound is: 24,714.96.

The projected closing price is: 25,750.71.

Candlesticks

A white body occurred (because prices closed higher 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 22.7407. This is not an overbought or oversold reading. The last signal was a buy 0 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 36.09. This is not a topping or bottoming area. However, the RSI just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 0 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 -114.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 10 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 6 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 535.121 at 25,801.490. Volume was 13% above average (neutral) and Bollinger Bands were 37% wider than normal.

Open High Low Close Volume___
25,401.41025,835.76025,286.85925,801.4902,164,240,640

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

Moving Averages: 10-period 50-period 200-period
Close: 26,483.90 27,384.77 29,660.07
Volatility: 29 24 23
Volume: 2,017,755,264 1,844,475,392 2,142,837,504

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 13.0% 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 6 periods.

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