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Hong Kong: HANG SENG INDEX (.HSI) Shares in Asia fail to hold

Hong Kong: HANG SENG INDEX (.HSI) Shares in Asia fail to hold

Shares in Asia failed to hold onto opening gains on Thursday, skidding further after the latest selloff on Wall Street.

Stocks fell in Tokyo, Sydney, Hong Kong and Seoul in early trading Thursday. Investors are in search of cash as fears of a prolonged coronavirus-induced recession take hold.

Japan’s Nikkei 225 index gave up 0.7% to 16,5602.26, while in South Korea, the Kospi sank 6.5% to 1,487.85. Hong Kong’s Hang Seng index slipped 4% to 21,397.56 and the Shanghai Composite index shed 1.9% to 2,676.79.

Even prices for longer-term U.S. Treasurys, which are seen as some of the safest possible investments, fell as investors sold what they could to raise cash. That pushed the yield on the 10-year Treasury sharply higher, to 1.24%. It had recently dropped below 1% for the first time ever.

Gold also fell, though Thursday it was up $5.20 per ounce at $5,483.10.

Investors are selling their highest-quality bonds to raise cash, thinking they will be the easiest to sell and will hold up the best. That’s paradoxically undercutting their prices further.

For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough, and those with mild illness recover in about two weeks. Severe illness including pneumonia can occur, especially in the elderly and people with existing health problems, and recovery could take six weeks in such cases.

All the uncertainty has pushed many people toward safety. Last month, investors pulled $17.5 billion out of stock mutual funds and exchange-traded funds, even though stocks set all-time highs in the middle of the month. Money-market funds, meanwhile, drew $25.5 billion, according to Morningstar.

The turmoil is also rocking foreign exchange markets as investors scrounge for U.S. dollars.

The dollar was at 109.20 Japanese yen Thursday, up from 108.07 late Wednesday. The euro fell to $1.0899 from $1.0913.

Technical Indicators

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 25,873.54.

The projected upper bound is: 22,842.53.

The projected lower bound is: 20,311.21.

The projected closing price is: 21,576.87.

Candlesticks

A black body occurred (because prices closed lower than they opened).
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 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 16.9070. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 4 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 18.24. 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 7 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 -143.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 12 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 18 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed down -582.689 at 21,709.131. Volume was 193% above average (trending) and Bollinger Bands were 169% wider than normal.

Open     High      Low     Close     Volume___
22,221.38122,380.34021,139.26021,709.1315,628,397,568
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 24,048.15 26,821.73 27,013.26
Volatility: 39 31 23
Volume: 3,997,233,664 2,279,035,648 1,751,798,016

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 19.6% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 36 periods. Our momentum oscillator is currently indicating that .HSI is currently in an oversold condition.

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