Hong Kong: HANG SENG INDEX (.HSI) progress toward ending their trade war and a Beijing official indicated new policies are coming to boost domestic consumption
The Hang Seng Index rose 2.3 per cent, or 586.87 points, to 26,462.32, while the Hang Seng China Enterprises Index gained 2.2 per cent, or 224.47 points, to 10,358.21.
On the mainland, the Shanghai Composite was up 0.71 per cent, or 17.89 points, to 2,544.35, and the CSI 300 of large caps rose 1 per cent, or 30.78 points, to 3,078.48.
Stocks from Geely Automobile Holdings in Hong Kong to mainland-listed appliance maker Midea Group rallied after Ning Jizhe, deputy chief of China’s top planning body, said policymakers will roll out policies to boost consumption of cars and home appliances.
Adding to optimism was an earlier tweet by President Donald Trump, exclaiming “Talks with China are going very well!”
US stocks rallied overnight on the back of the positive sentiment. All three major indices ended higher.
“The Sino-US talks are progressing well and boosted the sentiment of the market,” said Louis Tse Ming-kwong, managing director of VC Asset Management. “This kind of euphoria will cover tomorrow’s trading as well.”
The Hang Seng will bob around its current level until Chinese New Year in the first week of February, he predicted.
Regarding Beijing’s policy announcement to boost consumption, “actions are louder than words,” said Tse. “The first thing they want to do is rouse spirit. In China, the economy is gradually declining so you have to say something to boost the morale, but we want to see action.”
Investors are in their first full week of trading of the new year, hoping to put the nightmarish 2018 behind them. The Hang Seng Index ended down 15 per cent for 2018 while the Shanghai Composite Index fell 25 per cent, making it the worst performing major market in the world. While traders remain cautious and the kick-off to the new year has been rocky, both the Shanghai and Hang Seng benchmarks are in positive territory.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 26,385.63.
The projected upper bound is: 27,571.90.
The projected lower bound is: 25,422.53.
The projected closing price is: 26,497.21.
A white body occurred (because prices closed higher 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 27 white candles and 23 black candles for a net of 4 white 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 9 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 87.2079. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 10 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 58.14. 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 59 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 210.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 3 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 1 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 586.871 at 26,462.320. Volume was 54% above average (neutral) and Bollinger Bands were 33% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 25,647.44 25,951.80 28,109.40
Volatility: 27 26 23
Volume: 1,546,489,856 1,685,941,504 1,867,929,088
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 5.9% below its 200-period moving average and is in an downward 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 bearish on .HSI and have had this outlook for the last 13 periods.