Hong Kong: HANG SENG INDEX (.HSI), mainland markets fall as profit takers move in

Hong Kong: HANG SENG INDEX (.HSI), mainland markets fall as profit takers move in

Hong Kong: HANG SENG INDEX (.HSI), mainland markets fall as profit takers move in

Hong Kong shares finished more than 1 percent lower Wednesday, hit by profit-taking after a two-day rally and as investors keep tabs on the spread of the coronavirus.

The Hang Seng Index slipped 1.2 percent, to 23,970.

Across the border, the Shanghai Composite Index dropped 0.2 percent, to 2,815, and the Shenzhen Composite Index eased 0.1 percent, to 1,740.

Most other Asian equities also retreated, while the oil market continued to fluctuate ahead of a crucial producers’ meeting.

Singapore lost 2 percent, while Sydney and Seoul eased each 0.9 percent. Bangkok, Manila and Jakarta also saw steep falls.

Tokyo, however, rose more than 2 percent as Japan’s government unveiled details of a US$1 trillion stimulus package, and Taipei piled on 1.4 percent. Wellington also rose and Mumbai was flat.

Jeffrey Halley, at Oanda, offered a warning for traders to beware any false dawn.

“A lot of good news has been built into asset markets this week on the most tenuous signs that the outbreak is peaking,” he said in note. “Should that be proved premature the correction… could be very ugly indeed.” 

He said a bear market rally should not be mistaken for the beginning of a V-shaped recovery, adding: “The best we can hope for is a U, with a W in a close second place.”

Oil prices rallied, but the commodity continues to swing as traders keenly await Thursday’s planned meeting of the world’s top producers, which will discuss a possible output cut.

The commodity has been battered by the virus as lockdowns around the world bring the global economy to a standstill and drag on demand, while a price war between Russia and Saudi Arabia has compounded the crisis.

Technical Indicators

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 25,424.98.

The projected lower bound is: 22,388.15.

The projected closing price is: 23,906.56.

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 27 white candles and 23 black candles for a net of 4 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 90.6037. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 7 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 48.95. 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 11 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 126.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 11 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 9 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed down -282.920 at 23,970.369. Volume was 13% below average (neutral) and Bollinger Bands were 5% narrower than normal.

Open     High      Low     Close     Volume___
24,191.32024,191.32023,897.40023,970.3691,840,854,144
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 23,518.99 25,379.73 26,719.88
Volatility: 28 40 27
Volume: 2,367,041,536 2,608,025,344 1,813,874,176

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 10.3% 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 50 periods.

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