Hong Kong: HANG SENG INDEX (.HSI) Investors buy on trade optimism, but long-term interest lacking
Stocks in Hong Kong rose on Tuesday as Beijing and Washington are said to be preparing for fresh trade talks, helping investors overcome the overnight rout in the U.S. markets.
The Hang Seng index gained 0.6 percent to 25792.87 and the Hang Seng China Enterprises index edged up 0.4 percent.
The market was lacklustre in the morning, treading in the negative territory by midday. But as the news of Chinese vice premier Liu He visiting the U.S. trickled in, investors became more optimistic across the board.
The rebound also lifted technology stocks, which were battered overnight on Wall Street, with Apple Inc leading the losses after the company’s supplies issued warnings on results.
Participants in Hong Kong shares will keep a close eye on the quarterly results of Tencent Holdings on Wednesday. The company’s shares rose 1.5 percent on Tuesday, after heavy losses in the past two sessions on the back of weak earnings expectations.
Energy stocks, however, bucked the rising trend in most of the market. The Hang Seng’s energy sub index closed down 1.6 percent. Chinese state-owned China National Offshore Oil Corporation Ltd’s stock, which fell 3.1 percent, was the worst performer in the Hang Seng.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 26,924.15.
The projected lower bound is: 24,566.74.
The projected closing price is: 25,745.45.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 22 white candles and 28 black candles for a net of 6 black 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 27.7499. This is not an overbought or oversold reading. The last signal was a sell 4 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 48.73. 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 21 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 7. This is not a topping or bottoming area. The last signal was a sell 3 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 8 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 159.689 at 25,792.869. Volume was 6% below average (neutral) and Bollinger Bands were 3% 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: 25,834.08 26,385.97 29,117.87
Volatility: 34 29 24
Volume: 1,993,351,040 1,972,072,064 2,107,204,352
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 11.4% 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 27 periods.
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