Hong Kong: HANG SENG INDEX (.HSI) explores rule change to curb back-door listings

Hong Kong: HANG SENG INDEX (.HSI) explores rule change to curb back-door listings

Hong Kong: HANG SENG INDEX (.HSI) explores rule change to curb back-door listings

Hong Kong Exchanges and Clearing on Friday proposed a number of new rules to crack down on back-door listings and related “shell companies”, including a ban that prohibits listed companies from selling major assets or shareholdings within three years after a change of ownership.

The proposal marked the latest effort of the HKEX, which operates Asia third largest stock market, to clean up problematic corporate behavior and to enhance market quality and investor protection. The exchange in April carried out a large scale listing reform in an effort to overtake Nasdaq within five years as the favourite listing destination for tech companies.

The Securities and Futures Commission issued a statement supporting the HKEX proposal, saying it was in line with reforms in recent years, including rules designed to curb sharp share price movements of GEM stocks on their trading debuts and highly dilutive capital-raisings that are prejudicial to minority shareholders.

“We will continue to focus on behaviour in the listed market which is harmful to the investing public. We will not hesitate to step in at an early stage under our ‘front-loaded’ approach where we see misconduct or other serious issues which justify intervention under the Securities and Futures Ordinance,” said Ashley Alder, chief executive of the SFC.

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 30,081.61.

The projected upper bound is: 29,923.09.

The projected lower bound is: 27,942.83.

The projected closing price is: 28,932.96.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 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 27.9026. 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 37.54. 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 -77. 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 10 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 457.789 at 28,955.109. Volume was 20% above average (neutral) and Bollinger Bands were 74% wider than normal.

Open High Low Close Volume___
28,463.85028,962.28928,463.85028,955.1092,464,071,680

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

Moving Averages: 10-period 50-period 200-period
Close: 29,176.00 30,396.11 29,968.38
Volatility: 24 21 21
Volume: 2,543,962,112 1,991,194,752 2,159,366,912

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 3.4% below its 200-period moving average and is in an downward trend. Volatility is relatively normal 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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