Hong Kong: HANG SENG INDEX (.HSI) soar to their highest level in over three months

Hong Kong: HANG SENG INDEX (.HSI) soar to their highest level in over three months

Hong Kong: HANG SENG INDEX (.HSI) soar to their highest level in over three months

Hong Kong stocks soared to their highest level in over three months on Monday, while China markets also climbed, as investors piled in on signs of US-China trade deal progress and the mainland regulator’s vow to reform the A-share market.

The Hang Seng Index soared by 1.7 per cent to 27,547.3 per cent, closing at the highest level since August 1. In China, the Shanghai Composite Index gained 0.6 per cent to close at 2,975.49, a one-week high, while the Shenzhen Component Index climbed 0.7 per cent.

The Hong Kong market has been roiling in the aftermath of ongoing anti-government protests, which have pushed the city’s economy into a technical recession. The Hang Seng benchmark plunged by 12 per cent between a recent high on July 2 and a low on August 13.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 26,614.38.

The projected upper bound is: 28,328.44.

The projected lower bound is: 26,826.11.

The projected closing price is: 27,577.27.

Candlesticks

A white body occurred (because prices closed higher 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 22 white candles and 28 black candles for a net of 6 black candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 3 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 93.4437. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 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 68.27. 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 53 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 309.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 10 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 buy 15 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 446.541 at 27,547.301. Volume was 13% above average (neutral) and Bollinger Bands were 19% narrower than normal.

Open     High      Low     Close     Volume___
27,299.88127,547.30127,299.46127,547.3011,777,502,720
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 26,871.88 26,415.93 27,730.35
Volatility: 15 18 18
Volume: 1,506,776,960 1,624,704,896 1,775,932,800

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 up today (bullish) 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 0.7% below 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 volume flowing into and out of .HSI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .HSI and have had this outlook for the last 2 periods.

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