Hong Kong: HANG SENG INDEX (.HSI) slides as airlines, casino stocks fall sharply
Hong Kong suffered more big losses on Monday as investors fret that the coronavirus could become a global pandemic, with energy firms and companies linked to tourism among the worst hit.
The Hang Seng Index fell 1.8 percent, over 487 points, to close at 26,820.
On the mainland, the Shanghai Composite Index slipped 0.3 percent, to 3,031. But the Shenzhen Composite Index rose 1.4 percent, helped by government pledges of support for businesses and stimulus measures including an interest rate cut.
Seoul led a sharp drop across Asian equity markets on Monday as South Korea announced a surge in Covid-19 infections, while oil plunged and safe-haven assets rallied on growing concerns about a possible pandemic.
News of the spread hammered the South Korea’s Kospi, which sank almost 4 percent, with market heavyweight Samsung diving 4.1 percent. The won fell 0.9 percent and is sitting at a six-month low.
Sydney, Bangkok and Manila each dropped more than 2 percent. Taipei, Jakarta, Singapore and Wellington were all off more than 1 percent. Mumbai eased 0.8 percent with eyes on Donald Trump’s visit to India.
The fear on trading floors has sent gold, a go-to asset in times of uncertainty, to a seven-year high, while high-yielding, riskier currencies including the Australian dollar and Indonesian rupiah, were well down.
Crude prices tanked on worries about plunging demand from China, which is the world’s biggest importer and consumer of the commodity, sending energy firms in the region sharply lower. Both main contracts are down more than 10 percent so far this year.
“With the volatility we’re seeing in the coronavirus event, that’s creating angst in the market on the back of growth and demand expectations and we’ve seen oil prices weaken,” said David Lennox at Fat Prophets. “The converse of that is the same event is carrying investors toward a safe haven play and that’s gold.”
Among individual stocks, travel and tourism linked firms continue to take a heavy hit with Sydney-listed Qantas plunging more than 7 percent, while in Hong Kong, Air China lost more than 6 percent and Cathay Pacific fell 1.3 percent.
Also in Hong Kong, Macau casino operators Sands China, Galaxy Entertainment and Wynn Macau were down between 1.4 and 3.8 percent.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 27,793.27.
The projected lower bound is: 25,861.54.
The projected closing price is: 26,827.40.
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 27 white candles and 23 black candles for a net of 4 white candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 5 falling windows in the last 50 candles–this makes the current falling window even more bearish. The two candles preceding the falling window were black, which makes this pattern even more bearish.
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 11.4698. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 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 39.17. 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 34 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 -140.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 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 0 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed down -487.930 at 26,820.881. Volume was 30% above average (neutral) and Bollinger Bands were 1% 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: 27,583.76 27,785.21 27,258.24
Volatility: 19 22 20
Volume: 1,660,463,488 1,632,399,232 1,663,966,592
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 gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
HANG SENG INDEX is currently 1.6% below its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on .HSI and have had this outlook for the last 18 periods.
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