Hong Kong: HANG SENG INDEX (.HSI) stock gains come despite protests, economic concerns
Signs of euphoria are showing in Hong Kong’s stock market as investors brush off five months of protests and an economic recession.
The Hang Seng Index is up 11% from August’s intraday low and back through the key 27,000-point level. The rally is the most widespread since January 2018, as 34% of the benchmark’s members are in overbought territory with relative strength indexes above 70. The Hang Seng’s RSI is at its highest since April.
Hong Kong’s stock gains, part of a global rally that has pushed U.S. equities to record highs, comes despite a deteriorating business outlook for the city as it faces a global trade slowdown and domestic political unrest and violence.
Increased optimism over U.S.-China trade negotiations and a rally in China’s yuan has also helped improve risk sentiment. Many of the companies on the Hang Seng measure are from mainland China, and generate most of their earnings in yuan.
The Hang Seng Index’s jump Tuesday, capping an almost 4% gain within the past week, has put the index near its 200-day moving average. It hasn’t closed above that technical metric since the end of July. Doing so would signal further gains are in the offing.
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 26,664.70.
The projected upper bound is: 28,464.78.
The projected lower bound is: 26,962.18.
The projected closing price is: 27,713.48.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.
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 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 98.0058. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 11 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 69.95. 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 54 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 243.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 11 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 16 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 136.100 at 27,683.400. Volume was 11% above average (neutral) and Bollinger Bands were 14% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 26,961.60 26,446.01 27,735.43
Volatility: 15 18 18
Volume: 1,531,955,200 1,627,248,640 1,775,400,960
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 0.2% 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 3 periods.
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