Hong Kong: HANG SENG INDEX (.HSI), mainland markets soar on rate cuts

Hong Kong: HANG SENG INDEX (.HSI), mainland markets soar on rate cuts

Hong Kong: HANG SENG INDEX (.HSI), mainland markets soar on rate cuts

Hong Kong and Shanghai shares rallied on Thursday following a surge on Wall Street, while investors were cheered by global central bank moves to mitigate the impact of the coronavirus.

Hong Kong’s Hang Seng Index jumped 2.1 percent, to 26,767.

On the mainland, the Shanghai Composite Index added 2 percent, to 3,071 and the Shenzhen Composite Index gained 1.8 percent, to 1,929.

“Shares in Chinese blue chips rose, suggesting “investors’ confidence was restored by the surge in US markets. We don’t have the panic selling evident last week when the market fell sharply,” said Francis Lun, a stock analyst in Hong Kong.

“Despite the specter of coronavirus lurking over the world’s economy, all appears well with the world, judging by Wall Street’s overnight performance,” Jeffrey Halley of Oanda said in a commentary.

China’s rate of new infections has plunged, even as coronavirus makes its presence felt in the far-flung corners of the globe,” he said.

Tokyo, Sydney, Seoul and Taipei ended more than 1 percent higher, while Bangkok and Wellington gained 2 percent or more.

Mumbai added 0.8 percent, while Singapore and Manila each added 0.2 percent.

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 27,152.29.

The projected upper bound is: 27,710.94.

The projected lower bound is: 25,783.49.

The projected closing price is: 26,747.22.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 51.5093. This is not an overbought or oversold reading. The last signal was a buy 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 45.22. 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 sell 42 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 -37. This is not a topping or bottoming area. 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 8 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 545.799 at 26,767.869. Volume was 53% above average (neutral) and Bollinger Bands were 10% wider than normal.

Open     High      Low     Close     Volume___
26,348.16026,805.58026,315.35926,767.8692,522,843,136
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 26,619.44 27,650.50 27,179.37
Volatility: 23 22 20
Volume: 2,190,099,968 1,743,724,288 1,656,834,432

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 1.5% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 26 periods.

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