Hong Kong: HANG SENG INDEX (.HSI) Index posts fresh 5-month high; China stocks rise on step making borrowing cheaper
The Hang Seng Index rose to its highest level in five months Monday, as traders bought up property stocks that have lagged the overall market due to protests that have rocked the city since June.
Hong Kong’s benchmark rose 0.3 per cent to 28,319.39. On July 26, it stood a 28,397.74. It has risen 9.6 per cent this year.
“Market sentiment remains good,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai. “People are chasing those sectors lagging behind,” such as property.
The Hang Seng Properties Sub-Index rose 0.9 per cent.
Wharf REIC climbed 3.6 per cent to HK$47.50. The owner of the Harbour City and Times Square luxury shopping malls has seen its stock hammered since protests began in June, driving away mainland tourists. It is only up 1.4 per cent for the year.
Sun Hung Kai Properties, Hong Kong’s largest property developer, rose 1.3 per cent to HK$119. It is up 6.6 per cent for the year.
A step by the People’s Bank of China to make borrowing cheaper boosted sentiment in both the mainland and Hong Kong. The central bank said over the weekend that the loan prime rate (LPR) would be used to replace the old loan-pricing system, a move that will cut the borrowing costs for businesses and individuals.
“A monetary easing is by all means a stimulus to the A share since it is a liquidity-driven market,” said He Yan, a hedge fund manager with Shanghai Shiva Investment. “But many traders remain cautious now after the Shanghai Composite Index broke through the 3,000-point level.”
Only one trading day remains in 2019. Markets in both the mainland and Hong Kong will be closed Wednesday.
Brokerages were among top gainers in mainland markets, rising 4.6 per cent according to an index tracking 46 of them compiled by Xuangubao.
The National People’s Congress over the weekend approved amendments to the Securities Laws that will make it easier for companies to list on the country’s stock exchanges. That will help brokerages, which also engage in underwriting.
Three brokerages hit the 10 per cent upside limit: SDIC Capital, to 13.76 yuan, Founder Securities, to 8.57 yuan, and Citic Securities, China’s largest publicly traded securities company, to 25.66 yuan.
Liquor stocks climbed 3.5 per cent, according to a Xuangubao gauge, including Kweichow Moutai, which rose nearly 2 per cent to 1,185.80 yuan, and Wuliangye Yibin, which gained nearly 3 per cent to 132.82 yuan.
Wireless headsets, which have been high fliers this year, fell 1.5 per cent, including Luxshare Precision Industry, which slipped 0.5 per cent, and GoerTek, which declined 1.7 per cent to 19.79 yuan.
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 27,208.09.
The projected upper bound is: 29,150.78.
The projected lower bound is: 27,546.84.
The projected closing price is: 28,348.81.
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 26 white candles and 24 black candles for a net of 2 white candles.
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 83.5033. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 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 70.10. 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 sell 34 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 103.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 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 10 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 93.971 at 28,319.391. Volume was 9% below average (neutral) and Bollinger Bands were 61% 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: 27,891.10 27,023.43 27,562.44
Volatility: 17 19 19
Volume: 1,487,517,568 1,478,100,608 1,693,529,728
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 2.7% above its 200-period moving average and is in an upward 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 bullish on .HSI and have had this outlook for the last 8 periods. Our momentum oscillator is currently indicating that .HSI is currently in an overbought condition.
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