Hong Kong: HANG SENG INDEX (.HSI) overtakes Japan as the world’s 2nd biggest economy

Hong Kong: HANG SENG INDEX (.HSI) overtakes Japan as the world’s 2nd biggest economy

Hong Kong: HANG SENG INDEX (.HSI) overtakes Japan as the world’s 2nd biggest economy

When it comes to paying up for the world’s common causes, like human rights, open-source research, climate change, ravages of war and famine in faraway countries, China likes to stress that as a poor country it lacks the means and urgencies to participate.

“The sausage,” as Berthold Brecht used to say, “takes precedence over morals.”

As a developing nation China has achieved astonishing progress though. In little more than two decades, helped by the globalization of trade and production, it has lifted 400 million people out of poverty and overtaken Japan as the world’s second biggest economy after the US. It is predicted to be the world’s biggest economy within the next decade.

In its insatiable hunger for es­sential commodities it has conquered the African continent with ‘loan diplomacy’, connected with central Asia, teamed up with Russia and asserted itself milita­rily in southeast Asia.

China’s consumer market seems fathomless: at primary school we used to joke that one billion Chinese spitting at the same place could make an ocean. Western companies didn’t see the banter. For car makers, luxury goods companies, wealth managers or agri­businesses, Chinese consumers are the holy grail of business planning. For apparently ever-expanding sales figures, corporations were ready to hand over their techno­logy, to accept the role of a mere junior partner in joint ventures, to bow to political demands of censorship and marketing and to open up home markets in a way Chinese markets would never have granted access themselves.

Soon, most multinationals were successfully wedded to the Chinese consumers with earnings going from strength to strength. China as a market was too vast to be dismissed. It was therefore only logical that investment advisers too began to entice us to put our savings into this fairy tale of 21st century capitalism.

Investing at the Shanghai or Hong Kong stock exchanges proved profitable for a long time, if often with puzzling results. The gamb­ling habits of Chinese punters caused more volatility than we had expected and created remarkable distortions. Shares of one and the same company listed on both exchanges, for instance, often showed an exorbitant premium in Shanghai where domestic gamblers were prevalent.

Listening to the utterances of Vice President Mike Pence and ‘trade adviser’ Peter Navarro, this is not so much about equal market access or respect for US intellectual property. It is an ill-defined, nebulous strategic rivalry. I am not so sure if a US government with ever shrinking expertise, including Trump’s juvenile troupe of advisers, have even a faint idea what they wished for and what an economic war with China might entail, hamstrung as they are already by minnows like Saudi Arabia.

China, in contrast, acts economically astute, competent and cherishes the advantages of international cooperation. It is hard to tell how viable official trade figures are, but as an economy it is growing clearly faster than any OECD country.

This means that the consumer market of a billion buyers will grow stronger. Companies operating on the main arteries of commerce like the above-mentioned BATs should profit increasingly, as they are not on a leash of personal data or consumer protection, as are their Western siblings. They are considered ‘national champignons’, the vanguard of AI development and Fintech, and enjoy political support – for the time being.

Many of the other national behemoths may do well too – banks, industrials. Yet in a world where truth is tightly managed, I am hesi­tant. And then, financially quite irrational, even foolish, I still see a noble people behind barbed wire…

Overall, the bias in prices is: Sideways.

The projected upper bound is: 27,630.33.

The projected lower bound is: 25,360.05.

The projected closing price is: 26,495.19.

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 23 white candles and 27 black candles for a net of 4 black 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 68.6247. This is not an overbought or oversold reading. The last signal was a sell 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 56.27. 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 34 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 102.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 16 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 21 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 55.721 at 26,506.750. Volume was 15% above average (neutral) and Bollinger Bands were 43% narrower than normal.

Open High Low Close Volume___
26,506.09026,683.25026,396.61926,506.7502,062,696,832

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

Moving Averages: 10-period 50-period 200-period
Close: 26,247.94 26,145.07 28,715.17
Volatility: 20 28 24
Volume: 1,412,714,752 1,838,565,760 1,958,750,080

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 7.7% below its 200-period moving average and is in an upward 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 bullish on .HSI and have had this outlook for the last 11 periods.

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