Hong Kong: HANG SENG INDEX (.HSI) stocks end higher ahead of the release of preliminary economic data

Hong Kong: HANG SENG INDEX (.HSI) stocks end higher ahead of the release of preliminary economic data

Hong Kong: HANG SENG INDEX (.HSI) stocks end higher ahead of the release of preliminary economic data

Chinese and Hong Kong stocks rose on Friday, with both benchmarks capping weekly gains, as investors keep an eye out on preliminary January economic data and high-stakes US-China trade talks due next week.

The Shanghai Composite Index added 0.4 per cent to 2,601.72 at the close, and the Hang Seng Index climbed 1.7 per cent to 27,569.19. Both indices completed their fourth straight weekly gains of at least 0.2 per cent this week.

While stocks in the mainland and the former British colony endured a dismal 2018, the two markets have made decent starts this year, amid prospects of more Chinese stimulus policies to check a decline in economic growth, a detente in the trade tension and foreign fund inflows.

Traders will keep a close watch on the readings of China’s January purchasing managers’ index due on Thursday, which will offer hints on the strength of the Asia’s biggest economy in 2019. China’s growth was the slowest since 2009 in the fourth quarter.

The China-US trade talks will also be in the spotlight again next week, as Vice-Premier Liu He flies to Washington to put the two sides back on to the negotiating table. Still, US Secretary of Commerce Wilbur Ross said the world’s two largest economies remain “miles and miles” away from reaching a trade deal.

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 26,637.80.

The projected upper bound is: 28,555.71.

The projected lower bound is: 26,675.11.

The projected closing price is: 27,615.41.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

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 80.3737. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 66.98. 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 72 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 158.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 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 14 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 7.771 at 27,576.961. Volume was 1% below average (neutral) and Bollinger Bands were 31% wider than normal.

Open High Low Close Volume___
27,695.81127,790.22127,462.36927,576.9611,757,882,880

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 27,105.62 26,294.81 27,876.68
Volatility: 16 23 23
Volume: 1,751,065,856 1,629,883,776 1,842,254,976

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 is currently 1.1% 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 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 10 periods.

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