Hong Kong: HANG SENG INDEX (.HSI) gains on bargain hunting, Asian markets mixed

Hong Kong: HANG SENG INDEX (.HSI) gains on bargain hunting, Asian markets mixed

Hong Kong: HANG SENG INDEX (.HSI) gains on bargain hunting, Asian markets mixed

Hong Kong stocks snapped a three-day losing streak on Tuesday to end with a small gain on bargain buying, but investors remain on edge over fears of a coronavirus pandemic.

The Hang Seng Index rose 0.3 percent, to close at 26,893.

On the mainland, the Shanghai Composite Index shed 0.6 percent, to 3,013 but the Shenzhen Composite Index added 0.5 percent, to 1,943.

Tokyo led losses in Asia with the Nikkei ending more than 3 percent lower. Sydney and Wellington each shed more than 1 percent and Shanghai dipped 0.6 percent. There were also losses in Bangkok and Jakarta.

However, Seoul jumped 1.2 percent, having plunged almost 4 percent on Monday in reaction to a spurt of infections in South Korea at the weekend. Singapore added 0.6 percent, Taipei rose 0.1 percent and Mumbai put on 0.3 percent.

“As the number of COVID-19 infections outside of China rises, investors are considering the potential ramification on the global economy beyond weaker growth in China and supply chain disruptions,” JP Morgan Asset Management’s Tai Hui said.

“Equity markets will remain volatile in the near term, driven by new infection numbers around the world.”

And analysts said the recent losses would provide a good buying opportunity as they looked past the virus and contemplated an improving economic outlook.

David Wong, an investment strategist at AllianceBernstein in Hong Kong, said: “The benefit of global quantitative easing and the trade war truce should ultimately provide more upside to the global economy than the coronavirus will apply downside risk.”

The return to equity markets also saw gold fall sharply, losing nearly 3 percent after hitting a seven-year high on Monday.

Oil prices, which tanked around 3.8 percent on Monday, jumped 1 percent in the afternoon, though concern about the impact on demand for the commodity in China was keeping gains subdued.

High-yielding, riskier currencies were also benefitting, with the South Korean won up 0.8 percent, Australia’s dollar 0.5 percent higher and the Mexican peso gaining 1 percent.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 27,868.21.

The projected lower bound is: 25,936.51.

The projected closing price is: 26,902.36.

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 27 white candles and 23 black candles for a net of 4 white 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 9.7533. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 5 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 40.45. 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 sell 35 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 -165.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 5 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 1 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 72.350 at 26,893.230. Volume was 22% above average (neutral) and Bollinger Bands were 2% narrower than normal.

Open     High      Low     Close     Volume___
26,722.39126,914.05126,667.03926,893.2301,924,042,880
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 27,514.70 27,794.34 27,245.89
Volatility: 17 22 20
Volume: 1,666,005,248 1,651,754,240 1,663,289,472

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 1.3% 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 19 periods.

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