Hong Kong: HANG SENG INDEX (.HSI) gains came after the U.S. central bank kept interest rates unchanged
Hong Kong shares rose to an over four-month high on Thursday, after the U.S. Federal Reserve signaled it would be patient about further rate increases.
The Hang Seng Index added 1.1% to 27,942.47, its highest close since Sept. 21. The gauge rose 8.1% in January, its best monthly performance in a year, as indications of progress in Sino-American trade talks, hopes of growth supportive measures in China and receding worries over rising U.S. interest rates lifted risk sentiment.
Drugmakers Sino Biopharmaceutical and CSPC Pharmaceutical led percentage gains on the gauge in January, rising 27.9% and 19.1%, respectively. The two stocks had fallen 27% or more in December. Sino Biopharm added 4.6% on Thursday, while CSPC climbed 3.7%.
On Thursday, insurance heavyweights AIA Group and Ping An Insurance Group climbed 2.4% and 2.6%, respectively. Tencent Holdings rose 0.5%. Coal producer China Shenhua Energy slipped 0.3% after saying it expects net profit for 2018 to have declined about 6.9% from a year ago to 44.5 billion yuan ($6.64 billion).
The day’s gains came after the U.S. central bank kept interest rates unchanged, as was widely expected, and said it will be “patient” as it determines future adjustments. At a news conference following the review, Fed Chairman Jerome Powell said the case for raising rates had “weakened somewhat.” The U.S. central bank raised rates four times in 2018.
All three U.S. equity indexes advanced overnight, also spurred by upbeat corporate earnings. The Nikkei Asia300 Index added 0.8%, and index futures pointed to a stronger opening on Wall Street on Thursday.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 26,778.29.
The projected upper bound is: 28,903.14.
The projected lower bound is: 27,044.62.
The projected closing price is: 27,973.88.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 9 rising windows in the last 50 candles–this makes the current rising window even more bullish.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 81.7834. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 1 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 70.65. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 75 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 152.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 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 buy 17 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 299.621 at 27,942.471. Volume was 29% above average (neutral) and Bollinger Bands were 12% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 27,368.51 26,383.97 27,829.98
Volatility: 13 23 23
Volume: 1,799,590,144 1,664,615,552 1,839,947,904
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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
HANG SENG INDEX is currently 0.4% above its 200-period moving average and is in an upward 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 moderate flows of volume into .HSI (mildly bullish). Our trend forecasting oscillators are currently bullish on .HSI and have had this outlook for the last 13 periods. Our momentum oscillator is currently indicating that .HSI is currently in an overbought condition.
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