Hong Kong: HANG SENG INDEX (.HSI) starts week with rally as Trump drops Mexico tariffs threat
Headline indices of the Hong Kong share market closed sharp higher on Monday, 10 June 2019, as risk sentiments boosted up after better-than-expected China’s trade data for May and news that U. S. President Donald Trump had suspended plans to impose tariffs on Mexico after the two countries arrived at an agreement on immigration. At closing bell, the Hang Seng Index advanced 2.27%, or 613.36 points, to 27,578.64. The Hang Seng China Enterprises Index was up 1.86%, or 192.60 points, to 10,526.92. Turnover increased to HK$91.9 billion from HK$67.1 billion on Thursday.
The local market closed on Friday for Dragon Boat Festival holiday.
Local market received a boost after the United States and Mexico struck a deal late Friday to avert a tariff war, with Mexico agreeing to meet U. S. demands to stem the flow of illegal Central American migrants. Trump had threatened to impose 5% import tariffs on all Mexican goods starting on Monday if Mexico did not commit to do more to tighten its borders.
China’s General Administration of Customs said on Monday that exports in May inched up 1.1% year-on-year, while imports fell 8.5% during the same period, as a result, China’s overall trade surplus was $41.65 billion in May. In April, China’s overall trade surplus in April was $13.8 billion, far below the projected $35 billion. That’s partly due to an unexpected rise of 4% in imports, and a surprise fall of 2.7% in exports for the month.
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 27,960.10.
The projected upper bound is: 28,382.52.
The projected lower bound is: 26,713.37.
The projected closing price is: 27,547.95.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 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 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.
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 68.9313. This is not an overbought or oversold reading. The last signal was a buy 2 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 45.55. 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 1 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 61. This is not a topping or bottoming area. The last signal was a buy 2 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 buy 1 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 613.361 at 27,578.641. Volume was 19% above average (neutral) and Bollinger Bands were 2% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 27,102.53 28,745.49 27,436.73
Volatility: 16 18 22
Volume: 1,986,666,368 2,029,274,112 1,872,002,304
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 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 0.5% above its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 22 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.