Hong Kong: HANG SENG INDEX (.HSI) shares ended higher sparked by speculation that the local government may act to ease protests
Hong Kong shares ended higher on Wednesday, with the city’s main equity gauge clinging to early gains sparked by speculation that the local government may act to ease protests.
The Hang Seng Index added 1.8% to 27,159.06, closing above 27,000 for the first time since Aug. 1. HSBC Holdings climbed 3.1%, contributing about a fifth of the index’s gains by points, while China Construction Bank added 2.8%.
Wednesday’s gains picked up pace in mid-morning trading after the South China Morning Post was cited on social media as reporting that Hong Kong Chief Executive Carrie Lam was set to respond to another one of the city’s demands, after withdrawing a controversial extradition bill last week.
SCMP later denied publishing such a report.
Still, local developers were among big gainers on Wednesday, with Sun Hung Kai Properties and CK Asset Holdings rising 3.2% and 3%, respectively, while Henderson Land Development advanced 4.3%.
“Overall sentiment in the market has improved,” said Steven Leung, executive director at UOB Kay Hian (Hong Kong). The market “is going to rebound more, no matter what the news is.”
The Hang Seng Index has risen 5.6% so far this month following the withdrawal of the bill that sparked monthslong protests in the city. Expectations for more support from China after the nation’s central bank cut banks’ reserve requirements for a third time this year have also helped. The gauge had slumped 7.4% in August.
Shares of local property developers have been among the worst hit since mass demonstrations began in the city in June, weighing on property prices and commercial rents as retail sales and inbound tourist numbers were affected by the unrest. While housing affordability is not among the protesters’ demands, some media reports have cited high property prices as a main grievance.
Speculation over the possibility of a new property and housing policy in Hong Kong also supported stocks this morning, according to analysts.
Meanwhile, markets are also looking ahead to the next round of high-level Sino-American trade talks, scheduled for early October in Washington.
China is expected to agree to buy more U.S. agricultural products as it hopes for a better trade deal with the U.S., the South China Morning Post reported, citing a source familiar with the situation.
The U.S. and China on Sept. 1 imposed a new round of punitive tariffs on goods imported from each other. The U.S. has said it will raise an existing 25% tariff on some Chinese goods to 30% on Oct. 1, and has threatened to impose new levies on Dec. 15, which would effectively cover all Chinese goods imported to the U.S.
In the mainland, the Shanghai Composite Index slipped 0.4%, while the yuan traded onshore edged 0.1% lower against the dollar to 7.1169.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 27,999.70.
The projected lower bound is: 26,250.58.
The projected closing price is: 27,125.14.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black 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 90.7149. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 12 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 63.71. 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 17 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 128.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 20 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 16 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 475.381 at 27,159.061. Volume was 15% above average (neutral) and Bollinger Bands were 19% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 26,283.63 27,032.61 27,648.40
Volatility: 24 21 20
Volume: 1,833,874,048 1,599,709,952 1,788,843,520
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 1.8% below its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 2 periods.
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