Hong Kong: HANG SENG INDEX (.HSI) ‘Santa Rally’ could carry on

Hong Kong: HANG SENG INDEX (.HSI) ‘Santa Rally’ could carry on

Hong Kong: HANG SENG INDEX (.HSI) ‘Santa Rally’ could carry on

Futures in Japan and South Korea opened mildly higher, suggesting sentiment remains positive and the ‘Santa Rally’ could carry forward towards year-end.

In Asia Pacific, major markets including Hong Kong and Australia are closed today.

Crude oil prices extended its upward trajectory and hit a 3-month high today, driven by a brighter economic outlook into 2020 and Saudi’s pledge to curb productions. Technically, Brent oil has broken out above a key resistance at US$ 66.25 and aims to reach the next level at US$ 68.5 (76.4% Fibonacci Retracement). This could give a boost to the energy sector and Singapore’s offshore & marine stocks.

The S&P 500 Index was flat over the last three trading sessions and its overall trend remains bullish. Fibonacci extension suggests that the next key resistance level could be found at around 3,263 points (161.8%), followed by a psychological resistance at 3,300 points.

Hang Seng Index has consolidated at around 28,000 points this week and momentum indicators DMI, MACD, RSI have shown early signs of weakness. This might also be due to the lack of participants in the holiday season. Immediate support levels can be found at 27,700 and then 27,400 points.

In the currency market, riskier currencies namely AUD, NZD and SEK outperformed other G10 peers, whereas safe-havens like JPY, USD, EUR and CHF were lagging. This pattern suggests overall sentiment is optimistic and could provide a greenlight for Asian trading today.

Technical Indicators

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 27,105.30.

The projected upper bound is: 28,685.11.

The projected lower bound is: 27,097.72.

The projected closing price is: 27,891.42.

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 26 white candles and 24 black candles for a net of 2 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 71.0988. This is not an overbought or oversold reading. The last signal was a sell 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 64.36. 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 32 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 67. This is not a topping or bottoming area. The last signal was a sell 2 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 buy 8 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed down -42.199 at 27,864.211. Volume was 69% below average (consolidating) and Bollinger Bands were 38% wider than normal.

Open     High      Low     Close     Volume___
27,901.51027,921.28927,792.66027,864.211 483,984,128
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 27,600.58 26,962.79 27,564.76
Volatility: 17 19 19
Volume: 1,494,102,272 1,484,055,808 1,703,732,864

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 1.1% above its 200-period moving average and is in an upward trend. Volatility is low 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 6 periods.

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