Hong Kong: HANG SENG INDEX (.HSI) Falls on Emergency Law
Hong Kong stocks fell on Friday after the city’s leader Carrie Lam announced a ban on face masks, effective October 5, amid more than four months of pro-democracy, anti-government protests.
The Nikkei 225 regained 68.46 points, or 0.3%, to 21,410.20
The Japanese yen, often seen as a safe-haven currency in times of market turmoil, traded at 106.77 against the U.S. dollar after strengthening from levels above 108 earlier in the week.
In Hong Kong, the Hang Seng dropped 289.28 points, or 1.1%, to 25,821.03. Shares of public rail system operator MTR, which has seen its infrastructure damaged amid the unrest in the city, fell 1.9%.
In a press conference, Lam said the face mask ban was necessary because “almost all protesters who carry out vandalism and violence covered their face.” The latest development came following weeks of protests in the embattled city that have periodically degenerated into violence.
Korean markets descended as shares of Hyundai Motor declined 1.6%.
Australia closed lower as shares of biotechnology firm CSL surged 3.2%. The moves came as Australian retail sales data for August came in below expectations but higher than the previous month.
Retail sales on a month-on-month, seasonally adjusted basis rose 0.4% in August, as compared to a flat outcome in July and against expectations of a 0.5% increase in an economist poll.
The Australian dollar changed hands at $0.6757 after rising from levels below $0.672 yesterday.
Markets in mainland China remained shuttered for holiday.
In other markets
In Korea, the Kospi index returned to trading after a holiday to lost 11.22 points, or 0.6%, to 2,020.69
In Taiwan, the Taiex index gained 18.57 points, or 0.2%, to 10,894.48
In Singapore, the Straits Times Index slipped 9.61 points, or 0.3%, to 3,078.36
In New Zealand, the NZX 50 restocked 71.62 points, or 0.7%, to 10,892.82
In Australia, the ASX 200 recouped 24.09 points, or 0.4%, to 6,517.08
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 26,565.19.
The projected upper bound is: 26,631.12.
The projected lower bound is: 24,900.01.
The projected closing price is: 25,765.56.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
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 18 white candles and 32 black candles for a net of 14 black 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 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 57.2059. 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 38.75. 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 33 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 -90. This is not a topping or bottoming area. The last signal was a buy 3 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 8 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed down -289.281 at 25,821.029. Volume was 31% below average (neutral) and Bollinger Bands were 20% 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: 26,094.75 26,361.57 27,652.46
Volatility: 12 21 19
Volume: 1,462,062,720 1,724,414,080 1,775,263,872
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 6.6% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 0 periods.
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