Hong Kong: HANG SENG INDEX (.HSI) red hot after the nightmare of 2018
Hong Kong’s Hang Seng shot up 8 per cent in January, after suffering a loss of 15 per cent over all of last year.
On Thursday, the Hang Seng closed at the highest level in four months – 27,942.47, or a 1.1 per cent gain.
Meanwhile, the Shanghai Composite Index was up 3.6 per cent in January. Last year, it was the world’s worst performing market – down by 25 per cent. It closed on Thursday up 0.4 per cent, like the Hang Seng closing out the month on a positive note.
Mainland China markets did so well in January that the country reclaimed its title as home to the world’s second-largest stock market, wresting the title from Japan.
Hong Kong department store operator The Sincere Company soared 26.3 per cent to 20 Hong Kong cents, before it suspended share trading in late morning trade. The company did not explain the reason for the suspension.
Meanwhile, in China, government statistics showed the country’s manufacturing Purchasing Managers’ Index (PMI) for January was 49.5, slightly better than December’s 49.4 and higher than a previous forecast of 49.3 in a Reuters survey of analysts.
But it was the second month the figure stayed below the 50-mark that separates expansion from contraction.
Among other indexes, the large-cap CSI300 rose 1.1 per cent to 3,201.63. The Shenzhen Component Index reversed losses and inched up 0.1 per cent to 7,479.22. The start-up board index ChiNext edged 0.2 per cent lower at 1,227.99.
Elsewhere in Asia, Japan’s Nikkei 225 rose 1.1 per cent to close at 20,773.49. Australia’s S&P/ASX 200 and South Korea’s Kospi dropped 0.4 per cent and 0.1 per cent to 5,864.70 and 2,204.85 respectively.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 26,831.19.
The projected upper bound is: 28,870.22.
The projected lower bound is: 27,074.88.
The projected closing price is: 27,972.55.
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 28 white candles and 22 black candles for a net of 6 white candles.
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 81.3053. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 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 70.35. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 76 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 138.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 8 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 18 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed down -11.730 at 27,930.740. Volume was 4% below average (neutral) and Bollinger Bands were 7% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 27,452.51 26,425.78 27,815.59
Volatility: 12 22 23
Volume: 1,797,220,608 1,674,180,864 1,841,305,728
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 0.4% above 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 moderate flows of volume into .HSI (mildly bullish). Our trend forecasting oscillators are currently bullish on .HSI and have had this outlook for the last 14 periods. Our momentum oscillator is currently indicating that .HSI is currently in an overbought condition.