Hong Kong: HANG SENG INDEX (.HSI) higher as investors cheered progress on US-China trade talks

Hong Kong: HANG SENG INDEX (.HSI) higher as investors cheered progress on US-China trade talks

Hong Kong: HANG SENG INDEX (.HSI) higher as investors cheered progress on US-China trade talks

Asian markets traded in the green Monday as investors cheered progress on US-China trade talks.

China’s Shanghai Composite Index (SHCOMP) improved 1.4%, following a 0.9% rise on Friday.

South Korea’s Kospi (KOSPI) also jumped up 1.4%. The Kospi ended positive Friday, too.

Hong Kong’s Hang Seng Index (HSI) is up 1%. The index seems likely to extend its gains from Friday, when it logged its biggest daily increase in more than a month.

Japanese markets were closed Monday for a holiday.

US President Donald Trump announced Friday that the United States and China have reached a “very substantial phase one deal.”

Details are still to be finalized, but it includes a halt on US tariff increases that were supposed to go into effect this week. Trump also told reporters that intellectual property, financial services and agricultural purchases are included in the agreement.

Trump also suggested that he would meet Chinese President Xi Jinping at next month’s APEC summit in Chile.

Trade tensions have dominated global markets. But sentiment has improved after the most recent developments. In the United States, futures for the Dow (INDU), S&P 500 (SPX) and Nasdaq (COMP) were all trading up about 0.3% Monday during Asian hours.

Meanwhile, investors shrugged off trade data from China that fell short of analyst expectations.

Data from the Chinese government on Monday showed that exports fell 3.2% last month compared to the same period a year ago. That’s worse than the 3% decline that analysts polled by Reuters expected. It’s also more than the 1% fall recorded in August.

September imports fell by 8.5% — well below the 5.2% drop that analysts predicted.

Exports will probably continue to drag in the months ahead. Friday’s limited trade agreement and the lack of increased tariffs should only have a “marginal impact” on on export growth, wrote Martin Lynge Rasmussen,

China economist for Capital Economics, in a research note Monday.

He added that while imports may tick up slightly in the short term, they are also not likely to have a strong rebound, since domestic demand is soft.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 26,504.75.

The projected upper bound is: 27,395.40.

The projected lower bound is: 25,606.54.

The projected closing price is: 26,500.97.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

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 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 74.2341. This is not an overbought or oversold reading. The last signal was a buy 8 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 55.74. 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 38 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 189.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 1 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 buy 0 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 213.410 at 26,521.850. Volume was 28% above average (neutral) and Bollinger Bands were 19% narrower than normal.

Open     High      Low     Close     Volume___
26,520.93026,636.93026,386.41026,521.8502,096,251,776
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 26,013.55 26,163.98 27,649.70
Volatility: 17 22 19
Volume: 1,473,886,848 1,757,520,768 1,785,340,416

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 4.1% 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 5 periods.

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