Hong Kong: HANG SENG INDEX (.HSI) ongoing tensions between Beijing and Washington

Hong Kong: HANG SENG INDEX (.HSI) ongoing tensions between Beijing and Washington

Hong Kong: HANG SENG INDEX (.HSI) ongoing tensions between Beijing and Washington

Mainland Chinese shares tumbled on Friday amid ongoing tensions between Beijing and Washington.

The Shanghai composite slipped 2.48% to close at 2,882.30 and the Shenzhen component dropped 3.15% to finish its trading day at 9,000.19. The Shenzhen composite fell 3.256% to close at 1,533.22

Hong Kong’s Hang Seng index also declined more than 1%, as of its final hour of trading.

Investors had largely priced in the two economic powerhouses to reach a deal this month. Instead, the U.S. hiked tariffs on $200 billion worth of Chinese imports. China retaliated with higher tariffs on $60 billion worth of goods.

To exacerbate matters, U.S. President Donald Trump on Wednesday declared a national emergency over threats against American technology. In addition, the U.S. Department of Commerce announced the addition of Huawei Technologies and its affiliates to the Bureau of Industry and Security (BIS) Entity List, making it more difficult for the Chinese telecom giant to conduct business with U.S. companies.

“If carried through, the ramifications would be beyond the financial viability of Huawei; it would cause a sharp deterioration in the relationship between the US and China, severely slow the rolling out of 5G networks around the world in the coming years, and ultimately begin the process of decoupling between the two nations,” Shayne Heffernan, CEO and Founder of Heffx wrote in a note on Friday.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 28,785.62.

The projected lower bound is: 27,072.67.

The projected closing price is: 27,929.15.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white 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. It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with HANG SENG INDEX), 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 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 22.6793. 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 32.60. 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 23 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 -98. 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 18 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed down -328.609 at 27,946.461. Volume was 3% above average (neutral) and Bollinger Bands were 65% wider than normal.

Open High Low Close Volume___
28,428.00028,428.00027,909.73027,946.4611,981,630,848

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

Moving Averages: 10-period 50-period 200-period
Close: 28,713.12 29,258.41 27,520.51
Volatility: 24 19 22
Volume: 2,378,899,456 1,996,259,072 1,840,807,936

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% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 7 periods.

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