Hong Kong: HANG SENG INDEX (.HSI) Investors rushed to buy companies that are less reliant on the strength of the economy
Chinese stocks rebounded after two days of losses on Wednesday, as investors took refuge in consumer and pharmaceutical companies after official data showed a slump in profits at industrial companies.
The Shanghai Composite Index gained 0.9 per cent, or 25.62 points, to 3,022.71 at the close, with sub-gauges tracking consumer staples and health care stocks rising at least 2.7 per cent. Makers of lithium battery-related products for electric cars slumped after China said it will slash subsidies for new-energy vehicles by as much as 60 per cent. Hong Kong’s Hang Seng Index rose 0.6 per cent.
Traders were seeking safe assets as concerns mounted that economic fundamentals may not improve as quickly as the run-up on stock prices.
Straight after data released in the morning showed a sharp decline in industrial profits, investors rushed to buy companies that are less reliant on the strength of the economy. Brokerage Shenwan Hongyuan Group said the yield on China’s sovereign bonds will drop further in the next two quarters, as growth remains stagnant.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 29,508.40.
The projected lower bound is: 28,030.54.
The projected closing price is: 28,769.47.
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 31 white candles and 19 black candles for a net of 12 white 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 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 15.9293. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 50.78. 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 sell 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 -46. This is not a topping or bottoming area. 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 sell 3 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 161.340 at 28,728.250. Volume was 13% below average (neutral) and Bollinger Bands were 33% narrower than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 29,006.33 28,244.31 27,477.85
Volatility: 17 17 22
Volume: 1,757,262,208 1,863,178,240 1,843,157,248
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 4.6% above its 200-period moving average and is in an downward trend. Volatility is 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 1 periods.