Hong Kong: HANG SENG INDEX (.HSI) joins Asian rally as virus death rates fall
Hong Kong stocks ended Monday with healthy gains, lifted by signs that new infections of coronavirus are slowing in some of the worst-hit countries, while energy firms were boosted by last week’s surge in oil prices.
The Hang Seng Index rose 2.2 percent, to 23,749. The mainland markets were closed for a holiday.
Most other Asian markets rose reports of falling death rates provided some much-needed hope in the battle against the coronavirus, though oil prices dipped after a meeting of top producers was delayed.
Tokyo, Sydney and Manila all rose more than 4 percent, while Seoul, Singapore and Jakarta gained almost 4percent. Taipei added 1.6 percent.
“Focus in markets will now turn to the path out of lockdown and to what extent containment measures can be lifted without risking a second wave of infections,” said National Australia Bank’s Tapas Strickland.
However, observers remain cautious as the US enters what US President Donald Trump said would be “a time that’s going to be very horrendous” with “some really bad numbers”.
Erik Nielsen, of UniCredit SpA, said: “There is light at the end of the tunnel but it’s still a long tunnel.”
Attention this week will be on a planned meeting of Opec and other key crude producers aimed at easing a supply glut that has sent oil prices crashing.
“If the Americans don’t take part, the problem which existed before for the Russians and Saudis will remain — that they cut output while the US ramps it up, and that makes the whole thing impossible,” Fyodor Lukyanov, a Kremlin adviser, said.
But even if a deal is reached, there is widespread scepticism that suggested cuts of 10 million barrels a day will be enough to help the oil market, owing to a collapse in demand caused by the pandemic.
“The likelihood of a deal being done is extremely low,” Daniel Hynes, at Australia & New Zealand Banking Group, said. “Certainly the type of agreement you’d need to stabilise the market is a long shot given how much demand has been hit.”
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 25,261.29.
The projected upper bound is: 25,193.04.
The projected lower bound is: 22,138.79.
The projected closing price is: 23,665.92.
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 28 white candles and 22 black candles for a net of 6 white candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 5 rising windows in the last 50 candles–this makes the current rising window even more bullish.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 66.9366. This is not an overbought or oversold reading. The last signal was a sell 5 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 47.13. 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 9 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 89. This is not a topping or bottoming area. The last signal was a buy 9 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 7 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 513.010 at 23,749.119. Volume was 13% below average (neutral) and Bollinger Bands were 24% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 23,315.70 25,517.46 26,763.88
Volatility: 39 40 26
Volume: 2,651,396,864 2,576,826,880 1,812,572,416
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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
HANG SENG INDEX is currently 11.3% 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 48 periods.
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