Hong Kong: HANG SENG INDEX (.HSI) rise for first time in four days
Chinese stocks closed higher for the first time in four days on Friday, following comments by a Federal Reserve official that suggested the US central bank would cut interest rates more aggressively than anticipated.
The Shanghai Composite Index rose 0.9 per cent to 2,924.2 at the close, snapping a three-day, 1.4 per cent losing streak. The gauge was down 0.2 per cent for the week. In Hong Kong, the Hang Seng Index added 1.1 per cent to 28,765.40.
Benchmarks across Asia, from Japan to South Korea and Taiwan, also gained after New York Fed President John Williams referred to the need for half point quick action when rates are already low. A spokesman for the official later clarified the remarks were not meant to suggest a significant cut in rates by the end of this month.
The Fed is widely expected to lower borrowing costs this month, compared with a 33 per cent probability of raising interest rates based on forecasts made in January, according to Bloomberg.
“Not only the Federal Reserve – central banks in emerging economies have also adopted accommodative policies,” said Dai Ming, fund manager at Hengsheng Asset Management in Shanghai. “So stocks are benefiting from a loose liquidity situation.”
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 28,184.51.
The projected upper bound is: 29,554.22.
The projected lower bound is: 27,952.68.
The projected closing price is: 28,753.45.
A white body occurred (because prices closed higher than they opened).
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 25 white candles and 25 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 7 rising windows in the last 50 candles–this makes the current rising window even more bullish.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is 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 86.1332. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 5 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 59.29. 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 29 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 56. This is not a topping or bottoming area. The last signal was a buy 7 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 0 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 303.740 at 28,765.400. Volume was 29% below average (neutral) and Bollinger Bands were 55% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 28,455.08 27,973.48 27,550.30
Volatility: 14 18 22
Volume: 1,157,960,192 1,797,152,768 1,828,094,976
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 4.4% 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 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 21 periods.
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