Hong Kong: HANG SENG INDEX (.HSI) slips as Iran tensions send oil, gold up

Hong Kong: HANG SENG INDEX (.HSI) slips as Iran tensions send oil, gold up

Hong Kong: HANG SENG INDEX (.HSI) slips as Iran tensions send oil, gold up

Hong Kong shares recovered slightly by the end of the morning session on Wednesday after opening sharply down as tensions between Iran and the US escalated dramatically with Tehran launching a missile attack.

The Hang Seng Index fell 0.8 percent, to 28,105 by noon.

On the mainland, the Shanghai Composite Index fell 1.4 percent, to 3,060 while the Shenzhen Composite Index lost over 1 percent, to 1,773.

In Tokyo, the benchmark Nikkei 225 index fell 1.6 percent to 23,204 and Sydney was down 0.4 percent.

The price of oil spiked after Iran launched revenge attacks on US forces in Iraq, with the main US contract jumping by more than 4.5 percent.

Safe haven assets also rose Wednesday as investors dumped stocks and headed to the hills.

Gold was up more than 2 percent, surging above US$1,600 an ounce for the first time in six years, before falling back slightly.

The Japanese yen, where investors traditionally take refuge in times of uncertainty, was also up.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 27,397.77.

The projected upper bound is: 28,932.66.

The projected lower bound is: 27,300.00.

The projected closing price is: 28,116.33.

Candlesticks

A white body occurred (because prices closed higher than they opened).
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 26 white candles and 24 black candles for a net of 2 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 6 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.

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 24.9614. This is not an overbought or oversold reading. The last signal was a sell 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 58.44. 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 3 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 -15. This is not a topping or bottoming area. The last signal was a sell 2 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 0 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed down -234.141 at 28,087.920. Volume was 11% above average (neutral) and Bollinger Bands were 34% wider than normal.

Open     High      Low     Close     Volume___
27,999.58028,198.60927,857.73028,087.9201,709,241,600
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 28,213.64 27,214.58 27,544.03
Volatility: 14 19 19
Volume: 1,323,598,720 1,492,842,880 1,686,600,832

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 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 2.0% 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 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 14 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

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