Hong Kong: Hang Seng Index (.HSI) higher even as investors grappled with lingering worries over global growth

Hong Kong: Hang Seng Index (.HSI) higher even as investors grappled with lingering worries over global growth

Hong Kong: Hang Seng Index (.HSI) higher even as investors grappled with lingering worries over global growth

Hong Kong shares edged up on Wednesday, even as investors grappled with lingering worries over global growth and political uncertainty in parts of Asia and Europe.

The Hang Seng Index added 0.2% to 26,270.04 after trading in a narrow 242-point range. China Resources Land rose 4.5% to HK$32.85 after reporting a 43.8% surge in profit for the first half and a 4.7% increase in revenue. HSBC reiterated its “buy” rating on the stock and raised its target price to HK$43.30 from HK$40.60. The stock contributed to more than a fourth of the gauge’s gains by points.

Bourse operator Hong Kong Exchanges & Clearing ended 0.8% higher. U.S.-listed Chinese e-commerce major Alibaba Group Holding is postponing its Hong Kong listing amid protests in the city, Reuters reported, citing sources.

Among decliners on the 50-stock index, Hong Kong & China Gas fell 5.3% after reporting an 18.8% decline in profit for the first half of the year.

Globally, investors are watching for more details on the ongoing Sino-American trade spat. They are also worried about political turmoil in Britain as it prepares to leave the European Union, and the prospect of elections in Italy after Prime Minister Giuseppe Conte resigned on Tuesday.

The Hang Seng Index had been consolidating over the past few days, said Conita Hung, investment strategy director at Tiger Faith Asset Management. “I’m inclined to be bearish these days because of the situation in Hong Kong and as the trade talks look like they will only get prolonged.”

Technical Indicators

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 26,958.21.

The projected upper bound is: 27,090.78.

The projected lower bound is: 25,388.52.

The projected closing price is: 26,239.65.

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.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with HANG SENG INDEX). It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend, it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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 93.6999. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 41.25. 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 2 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 52. This is not a topping or bottoming area. The last signal was a buy 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 buy 1 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 38.500 at 26,270.039. Volume was 4% below average (neutral) and Bollinger Bands were 81% wider than normal.

Open     High      Low     Close     Volume___
26,160.53926,318.13126,075.91026,270.0391,701,479,168
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 25,849.15 27,621.91 27,616.68
Volatility: 20 20 21
Volume: 1,804,166,272 1,578,778,368 1,792,333,312

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 4.9% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of .HSI (mildly bearish). Our trend forecasting oscillators are currently bearish on .HSI and have had this outlook for the last 17 periods.

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