Hong Kong: HANG SENG INDEX (.HSI) likely to find renewed support

Hong Kong: HANG SENG INDEX (.HSI) likely to find renewed support

Hong Kong: HANG SENG INDEX (.HSI) likely to find renewed support

The Hong Kong stock market has moved lower in two of three trading days since the end of the two-day winning streak in which it had accelerated almost 1,850 points or 8.3 percent. The Hang Seng Index now rests just above the 23,175-point plateau although it’s likely to find renewed support on Tuesday.

The global forecast for the Asian markets is cautiously optimistic, with bargain hunting likely to follow the heavy selling seen in recent sessions, The European and U.S. markets were up and the Asian bourses figure to follow suit.

The Hang Seng finished sharply lower on Monday following losses from the casinos, properties and insurance companies.

For the day, the index plunged 309.17 points or 1.32 percent to finish at 23,175.11 after trading between 22,973.33 and 23,491.51.

Technical Indicators

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 25,432.98.

The projected upper bound is: 24,903.89.

The projected lower bound is: 21,837.57.

The projected closing price is: 23,370.73.

Candlesticks

A black body occurred (because prices closed lower 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 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 71.7267. This is not an overbought or oversold reading. The last signal was a sell 1 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 43.38. 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 5 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 58. This is not a topping or bottoming area. The last signal was a buy 5 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 buy 3 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 307.102 at 23,482.211. Volume was 75% below average (consolidating) and Bollinger Bands were 102% wider than normal.

Open     High      Low     Close     Volume___
23,613.27023,627.52923,460.61923,482.211 515,690,400
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 22,818.68 25,908.64 26,846.75
Volatility: 64 40 26
Volume: 3,286,047,232 2,486,031,616 1,791,871,360

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 12.5% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 44 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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