Hong Kong: Hang Seng Index (.HSI) looks set to be cautious after a battering last week
Market sentiment looks set to be cautious on Monday after a battering last week, following China’s yuan breaching the psychological threshold of 7 against the US dollar, escalating the US-China trade war.On Friday, Chen Yuan, a former deputy governor of the People’s Bank of China, said at a China Finance 40 meeting in Yichun, Heilongjiang province, that the US labelling China a currency manipulator “signifies the trade war is evolving into a financial war and a currency war”. He said policymakers must prepare for long-term conflicts.
US President Donald Trump, meanwhile, said it was “fine” if planned talks in September were called off.
In Hong Kong, protests continued to escalate for a 10th consecutive weekend, with police again using tear gas against protesters, who hurled projectiles and petrol bombs. The social unrest is the biggest challenge to Chinese control of the city since it was handed back by the UK in 1997, and is increasingly starting to impact the economy.
Markets in Japan, Singapore, India, Malaysia, Philippines and Thailand are shut for various public holidays on Monday.
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 27,354.73.
The projected upper bound is: 26,630.09.
The projected lower bound is: 24,967.75.
The projected closing price is: 25,798.92.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black 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).
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 46.1057. This is not an overbought or oversold reading. The last signal was a buy 2 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 22.01. 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 buy 45 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 -82. This is not a topping or bottoming area. The last signal was a buy 2 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 15 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed down -114.580 at 25,824.721. Volume was 33% below average (neutral) and Bollinger Bands were 111% wider 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: 26,641.79 27,805.48 27,601.03
Volatility: 20 19 21
Volume: 1,774,512,768 1,565,298,304 1,794,487,040
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 6.4% below its 200-period moving average and is in an downward trend. Volatility is 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 10 periods. Our momentum oscillator is currently indicating that .HSI is currently in an oversold condition. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.
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