Hong Kong: HANG SENG INDEX (.HSI) retreat as uncertainty over U.S.-China trade deal grows

Hong Kong: HANG SENG INDEX (.HSI) retreat as uncertainty over U.S.-China trade deal grows

Hong Kong: HANG SENG INDEX (.HSI) retreat as uncertainty over U.S.-China trade deal grows

Asian shares were mostly lower Thursday as optimism about progress in trade talks between the U.S. and China started wearing off.

Japan’s benchmark Nikkei 225 NIK, -0.65% slipped 0.8% in early trading. Australia’s S&P/ASX 200 XJO, +0.29% edged up nearly 0.3% while South Korea’s Kospi SEU, -0.45% was slightly lower. Hong Kong’s Hang Seng HSI, -0.89% dipped 0.5% while the Shanghai Composite SHCOMP, +0.14% was about flat.

Among individual stocks, Renesas Electronics 6723, -14.62% plunged in Tokyo trading after a report that the chip maker will partially halt production for two months, citing a slowdown in demand from China. Robotics maker Fanuc 6954, -2.80% fell as well, along with Nintendo 7974, -1.93% . In Hong Kong, ever-volatile Sunny Optical 2382, -5.61% and AAC 2018, -3.89% shares dropped, while real-estate stocks gained. Samsung 005930, +1.02% advanced in Korea, while Rio Tinto RIO, -4.76% slid in Australia.

On Wall Street, health care companies led U.S. stocks broadly lower Wednesday, giving the market its third straight loss. Technology and energy stocks also bore the brunt of the selling, offsetting gains in materials and utilities companies. Several retailers also rose. Smaller companies fell more than the rest of the market.

At times, the market has also drawn optimism over the prospects that the U.S. and China will resolve their trade dispute. U.S. and Chinese officials have hinted that some kind of agreement could be finalized by the end of March, with President Donald Trump and President Xi Jinping possibly meeting to formalize the deal at Trump’s private club in Mar-a-Lago, Florida.

Last year, Trump imposed a series of tariffs on Chinese goods in hopes of pressuring Beijing to support more favorable terms for the United States. In June, the White House levied import taxes of 25% on $50 billion of Chinese imports. It followed in September with 10% duties on an additional $200 billion.

Asian investors were also staying cautious ahead of a European Central Bank board meeting later in the global day.

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 27,696.88.

The projected upper bound is: 29,598.05.

The projected lower bound is: 28,077.41.

The projected closing price is: 28,837.73.

Candlesticks

A black body occurred (because prices closed lower 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 32 white candles and 18 black candles for a net of 14 white 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 50.6753. This is not an overbought or oversold reading. The last signal was a sell 6 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 61.20. 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 7 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 45. This is not a topping or bottoming area. The last signal was a sell 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 5 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed down -258.150 at 28,779.449. Volume was 2% below average (neutral) and Bollinger Bands were 33% narrower than normal.

Open High Low Close Volume___
28,965.42029,007.07028,772.44928,779.4491,744,322,944

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

Moving Averages: 10-period 50-period 200-period
Close: 28,848.87 27,374.64 27,608.91
Volatility: 10 18 22
Volume: 2,319,159,552 1,817,383,040 1,861,180,672

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 4.2% above its 200-period moving average and is in an upward 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 bullish on .HSI and have had this outlook for the last 35 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

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