Hong Kong: HANG SENG INDEX (.HSI) slump spurs wave of insider share buying among blue chips
During the holiday shortened week a total of 55 companies recorded 339 purchases worth HK$1.15 billion (US$146.57 million) compared with 42 companies, 281 purchases and HK$447 million the previous week. The number of companies on the sale side, on the other hand, were sharply down from the previous week’s 14 companies, 78 disposals and HK$308 million.
The surge in director buying and buy-backs coincided with the 3.2 per cent drop in the Hang Seng Index last week. The market is down by nearly 7 per cent since June 7.
Whenever the market drops sharply, we are beginning to see a pattern in the activity among directors of blue chip companies. The steep fall in the market this month prompted purchases in CK Asset Holdings and Sun Hung Kai Properties and buy-backs in New World Development.
Since 1993 directors of blue chip companies have consistently bought shares following heavy market downturns. Another notable buy-back last week was by Hopewell Holdings as the group bought back for the first time since 2016.
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 30,526.65.
The projected upper bound is: 30,270.77.
The projected lower bound is: 28,351.03.
The projected closing price is: 29,310.90.
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 22 white candles and 28 black candles for a net of 6 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 13.5152. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 9 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 35.02. 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 85 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 -135.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 9 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 5 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 42.648 at 29,338.699. Volume was 5% above average (neutral) and Bollinger Bands were 8% 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: 30,239.88 30,581.39 29,947.62
Volatility: 20 20 21
Volume: 2,113,244,032 1,925,965,696 2,144,910,464
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 2.0% below its 200-period moving average and is in an downward trend. Volatility is 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 3 periods.
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