Hong Kong: HANG SENG INDEX (.HSI) Plunges into Bear Market
Hong Kong’s stock market is caught in a perfect storm.
Fears about the trade war, emerging markets, China’s slowing economy, and individual stocks pushed the city’s benchmark Hang Seng Index () into a bear market on Tuesday.
The index ended the day 0.7% lower, closing more than 20% below its recent peak in January.
The Hong Kong market, one of the world’s most heavily traded, has been rocked this year by the escalating trade war between China and the United States. The waves of new tariffs have hurt Hong Kong because many of the biggest companies listed in the city are based in China.
Mainland Chinese stocks entered a bear market in late June, and have fallen a further 6% since then.
The trade war is already beginning to take its toll on the Chinese economy, according to recent data. China’s currency, the yuan, has also fallen in recent months.
That makes it more expensive for Chinese investors to buy Hong Kong stocks because they are priced in the Hong Kong dollar, which is pegged to the US dollar.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 28,347.14.
The projected upper bound is: 28,130.43.
The projected lower bound is: 26,401.22.
The projected closing price is: 27,265.83.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 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 4 rising windows in the last 50 candles–this makes the current rising window even more bullish.
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 63.1618. This is not an overbought or oversold reading. The last signal was a buy 1 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 46.59. 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 1 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 -20. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 7 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 271.920 at 27,286.410. Volume was 8% below average (neutral) and Bollinger Bands were 26% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 27,055.99 27,947.13 29,856.49
Volatility: 26 20 22
Volume: 2,008,130,304 1,759,779,456 2,145,245,184
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 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 8.6% below 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.