Hong Kong: HANG SENG INDEX (.HSI) improved market sentiment
Most markets in Asia opened higher on Tuesday as investor sentiment improved on the back of the positive trade talks between the United States (US) and China. Earlier cautious comments coming from the US Federal Reserve on future rate hikes also continued to provide relief to investors.
Tokyo’s Nikkei 225 index rose 0.82% or 168.82 points to 20,202.79 in early trade on Tuesday. The broader Topix index added 0.55% or 8.25 points, to 1,520.78.
Singapore’s Straits Times Index edged up 0.26% or 8.21 points on Tuesday morning, to 3,111.01 points, while Malaysia’s FTSE Bursa Malaysia rose 0.38% or 6.44 points, to 1,685.61.
US commerce secretary Wilber Ross on Monday said that Beijing and Washington could reach a trade deal the US “can live with”, sparking optimism from traders that the ongoing trade dispute may soon come to an end. The resumption of US-China trade talks involving mid-level officials also supported the slight uptick in equities in most Asian markets.
Investor sentiment also improved as traders banked on the dovish comments coming from US’ Federal Reserve’s chairman Jerome Powell last Friday who said that he was aware of the risks in the market and would be patient and flexible in policy decisions for this year.
Albeit the overall positive sentiment in most Asian markets, Chinese stocks however treaded lower minutes into trading, with the Shanghai Composite Index down 0.43% or 10.84 points to 2,522.25, while the Hang Seng Index slipped 0.07% or 17.77 points, to 25,817.93.
In spite of the positive sentiments from traders, many analysts are somewhat doubtful that the US and China can reach a comprehensive agreement to iron out all the issues before their agreed deadline in March.
Wall Street stocks pushes on with winning streak
The optimism stemming from traders toward the developments on the US-China trade talks and dovish comments from the Fed drove Wall Street stocks higher for the second-day winning streak on Monday.
The Dow Jones Industrial Average rose 98.19 points or 0.42%, to 23,531.35 points, while the broad-based S&P 500 jumped up 0.70% to 2,549.69 points, and Nasdaq jumped 1.26% to 6,823.47 points.
Tech giants led the way on Monday, with Amazon and Netflix surging 3.44% and 5.97%, respectively. But not all tech firms were in the green, as firms such as Apple and Google’s Alphabet either traded flat or fell slightly.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 26,383.83.
The projected upper bound is: 26,948.96.
The projected lower bound is: 24,837.18.
The projected closing price is: 25,893.07.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 79.8867. This is not an overbought or oversold reading. The last signal was a buy 9 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 50.56. 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 58 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 60. This is not a topping or bottoming area. The last signal was a buy 2 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 0 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 39.750 at 25,875.449. Volume was 9% below average (neutral) and Bollinger Bands were 39% 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: 25,576.55 25,916.91 28,134.60
Volatility: 24 26 23
Volume: 1,469,624,576 1,665,477,632 1,866,200,064
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 8.0% below its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. 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 12 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.