Hong Kong: HANG SENG INDEX (.HSI) market participants forecast a slower pace of interest rate hikes in the U.S

Hong Kong: HANG SENG INDEX (.HSI) market participants forecast a slower pace of interest rate hikes in the U.S

Hong Kong: HANG SENG INDEX (.HSI) market participants forecast a slower pace of interest rate hikes in the U.S

Hong Kong stocks rose on Wednesday as market participants forecast a slower pace of interest rate hikes in the U.S. and possible policy stimulus in China.

At the close of trade, the Hang Seng index was up 1.6 percent at 26,186.71, while the Hang Seng China Enterprises index rose 1.7 percent.

Gains were recorded across the board. The sub-index of the Hang Seng tracking energy shares was up 0.7 percent, the IT sector climbed 1.5 percent, while the financial sector ended 1.7 percent higher.

“People are expecting policy announcements at the leadership’s meeting this month,” said Steven Leung, director of sales at brokerage UOB Kay Hian in Hong Kong, referring to the Central Economic Work Conference, which typically takes place in December.

“The (Fed’s) view on the interest rate is no longer that aggressive, it is relatively dovish,” said Ben Kwong, Hong Kong-based head of research at KGI Asia.

“Even if the U.S. hikes, Hong Kong may not follow, because we have sufficient capital (liquidity) here. We didn’t go the full mile last time around,” he added. Hong Kong banks raised their benchmark rates for the first time in 12 years in September, by only by 12.5 basis points, when the Fed hiked 25 basis points.

Overall, the bias in prices is: Downwards

The projected upper bound is: 27,324.03.

The projected lower bound is: 25,011.80.

The projected closing price is: 26,167.92.

Candlesticks

A white body occurred (because prices closed higher 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 24 white candles and 26 black candles for a net of 2 black 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.

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 25.9665. This is not an overbought or oversold reading. The last signal was a buy 0 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 49.77. 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 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 -41. This is not a topping or bottoming area. The last signal was a buy 0 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 3 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 415.041 at 26,186.711. Volume was 21% below average (neutral) and Bollinger Bands were 23% narrower than normal.

Open High Low Close Volume___
26,054.01026,238.73026,013.35926,186.7111,429,660,544

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 26,415.08 25,953.22 28,555.17
Volatility: 27 28 23
Volume: 1,870,101,376 1,830,528,256 1,919,481,984

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 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 8.3% below its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 bullish on .HSI and have had this outlook for the last 19 periods.

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