Hong Kong: HANG SENG INDEX (.HSI) shares fell on Tuesday to mark their longest losing streak this year
Hong Kong shares fell on Tuesday to mark their longest losing streak this year, over intensifying worries about global growth.
The Hang Seng Index declined 0.5% to 26,761.52, its fifth consecutive decline. Social media and gaming major Tencent Holdings declined 1.9%. The company’s messaging app WeChat and micro-blogging site Weibo have reportedly barred users from changing their profile photos and other personal information around the 30th anniversary of China’s Tiananmen crackdown. Ping An Insurance Group dropped 1.6%, while China Construction Bank lost 0.7%. The three stocks contributed to more than half of the index’s losses by points.
The city’s main equity gauge, which entered a technical bull market in April after rising 20% from an October low, retreated 9.4% last month as U.S.-China trade tensions escalated. Markets await further negotiations between the two nations when U.S. President Donald Trump and China’s Xi Jinping meet at a G-20 summit in Japan later this month.
The yield on U.S. Treasurys slid to multiyear lows on Monday as investors bought into safe haven assets amid growth worries.
The retreat in U.S. Treasury yields signals the “market expects higher chances of a global recession going forward,” said Daniel So, strategist at CMB International Securities. “People are hoping that rate cuts from the People’s Bank of China or the Federal Reserve could cushion an economic slowdown.”
With “most bad expectations priced in,” the Hang Seng Index will likely find support at 26,000 points in June, he said.
The Fed, which raised rates four times last year, has paused on borrowing costs so far this year.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 28,028.26.
The projected upper bound is: 27,496.19.
The projected lower bound is: 25,918.66.
The projected closing price is: 26,707.42.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 13.8803. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 24.28. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 5 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 -117.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 5 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 sell 30 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed down -132.340 at 26,761.520. Volume was 20% below average (neutral) and Bollinger Bands were 38% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 27,191.30 28,866.83 27,454.08
Volatility: 11 17 22
Volume: 1,969,535,616 2,014,912,640 1,864,005,504
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 2.5% below its 200-period moving average and is in an downward 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 moderate flows of volume out of .HSI (mildly bearish). Our trend forecasting oscillators are currently bearish on .HSI and have had this outlook for the last 19 periods. Our momentum oscillator is currently indicating that .HSI is currently in an oversold condition.