Hong Kong: HANG SENG INDEX (.HSI) markets mostly tumble as China’s growth weakens more than expected
Asia Pacific markets mostly declined on Friday by the close, as China released worse-than-expected gross domestic product figures, impacted by Beijing’s protracted trade conflict with the U.S.
Mainland Chinese markets tumbled after the release of the data. The Shanghai composite fell 1.32% to close at 2,938.14, while the Shenzhen composite was down 1.17% to 1,616.72, and the Shenzhen component declined 1.16% to 9,533.50.
China released third-quarter GDP figures on Friday showing the economy grew 6.0% from a year ago — weaker than analyst expectations for 6.1%.
“Unchecked, the US-China trade conflict is set to sink growth well below 6%. Especially given that structurally, growth is set to moderate to 5% in the next 5-10 years,” Mizuho Bank’s Vishnu Varathan, head of economics and strategy, wrote in a note sent before the data was out.
The country may now have to escalate stimulus in the next one to two quarters if it wants to set a growth target of between 5.5% and 6% for next year, Macquarie analysts wrote in a note on Friday afternoon.
Beijing’s protracted trade dispute with the U.S. has weighed on its economy, with growth slowing to 6.2% in the last quarter — its slowest pace in 27 years. China had emphasized Thursday that the U.S. must remove tariffs in order for the two countries to reach a final agreement on trade.
Over in Hong Kong, the Hang Seng index fell 0.72% in the afternoon. Property developers in Hong Kong pared some gains they made the day before. Shares of New World Development dropped 1.07%, Henderson Land fell 1.68% and CK Asset tumbled 0.46%.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 27,527.06.
The projected lower bound is: 25,941.00.
The projected closing price is: 26,734.03.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with HANG SENG INDEX). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 85.1921. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 12 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 58.09. 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 119.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 5 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 buy 4 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed down -128.910 at 26,719.580. Volume was 5% below average (neutral) and Bollinger Bands were 39% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 26,267.17 26,197.84 27,668.10
Volatility: 18 19 19
Volume: 1,627,044,480 1,698,894,208 1,782,687,744
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 3.4% 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 1 periods.
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