Hong Kong: HANG SENG INDEX (.HSI) sentiment boosted by bullish global markets performances

Hong Kong: HANG SENG INDEX (.HSI) sentiment boosted by bullish global markets performances

Hong Kong: HANG SENG INDEX (.HSI) sentiment boosted by bullish global markets performances

The market started on a bearish note last week after a two-week decline but rebounded to close marginally higher on bargain hunting.

Shayne Heffernan said “don’t be too quick to write off China, the new reforms in Beijing should see a boost in Hong Kong business”.

The sentiment was also boosted by bullish global markets performances.

Local institutions were supporting the market from continuous foreign institutions selling. Banking stocks supported the market.

The FBM KLCI increased 0.6 points in a week after rebounding from a low of 1,664.30 points.

The average daily trading volume increased to four billion shares last week as compared to 3.1 billion in the previous week.

The average daily trading value increased to only RM3 billion from RM2.7 billion.

This indicates more lower capped stocks, which are favoured among local retail, were being traded.

Foreign institutions remained net sellers last week but at a lower strength. Local retail participants were also net sellers.

Net sells from foreign institutions and local retail were RM148.7 million and RM30.6 million respectively. Net buy from local was RM179.3 million.

In the FBM KLCI, gainers marginally out-paced decliners 15 to 14. The top three gainers were Press Metal Aluminium Holdings Bhd (6.5 per cent in a week to RM4.60), RHB Bank (4.3 per cent to RM5.80) and AMMB Holdings Bhd (+2.2 per cent to RM4.60).

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 29,874.10.

The projected lower bound is: 28,277.08.

The projected closing price is: 29,075.59.

Candlesticks

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 31 white candles and 19 black candles for a net of 12 white candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with HANG SENG INDEX), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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 80.8046. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 3 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 61.00. 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 13 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 106.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.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 11 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 160.869 at 29,012.260. Volume was 16% above average (neutral) and Bollinger Bands were 49% narrower than normal.

Open High Low Close Volume___
28,843.85929,204.73028,828.26029,012.2602,035,638,144

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

Moving Averages: 10-period 50-period 200-period
Close: 28,806.19 27,743.98 27,541.72
Volatility: 17 19 23
Volume: 1,964,327,936 1,875,964,032 1,865,047,680

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 5.3% 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 41 periods.

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