Hong Kong: HANG SENG INDEX (.HSI) investors worried about the risk of escalating trade tensions

Hong Kong: HANG SENG INDEX (.HSI) investors worried about the risk of escalating trade tensions

Hong Kong: HANG SENG INDEX (.HSI) investors worried about the risk of escalating trade tensions

Hong Kong’s Hang Seng index on Tuesday ended at its lowest close in nearly 16 weeks as investors worried about the risk of escalating trade tensions between Washington and Beijing despite a temporary easing of restrictions China’s Huawei.

Washington on Monday temporarily eased trade restrictions imposed last week on China’s Huawei Technologies Co Ltd in an attempt to minimise disruption for its customers. But Huawei’s founder, Ren Zhengfei, dismissed the move and said the tech firm had prepared for U.S. action.

The easing of restrictions and Ren’s comments boosted some Huawei suppliers in mainland markets, but failed to overcome investor concerns in Hong Kong. A sub-index tracking IT firms ended down 0.2%. 

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 28,487.78.

The projected lower bound is: 26,774.53.

The projected closing price is: 27,631.15.

Candlesticks

A black body occurred (because prices closed lower 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 27 white candles and 23 black candles for a net of 4 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

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.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 7.3439. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 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 29.85. This is where it usually bottoms. 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 25 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 -102.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 2 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 sell 20 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed down -130.369 at 27,657.240. Volume was 18% above average (neutral) and Bollinger Bands were 80% wider than normal.

Open High Low Close Volume___
27,671.40027,915.16027,598.06127,657.2402,298,133,248

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 28,328.46 29,208.89 27,509.82
Volatility: 19 19 22
Volume: 2,413,765,888 1,993,271,168 1,843,080,704

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 0.5% above 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 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 9 periods. Our momentum oscillator is currently indicating that .HSI is currently in an oversold condition.

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