Hong Kong: HANG SENG INDEX (.HSI) stocks give up early gains
An incredible day on Wall Street, which saw major indexes finishing at least 5% higher, spurred Asian stock gains Thursday as some traders returned from a Christmas break.
U.S. markets were, however, indicating a pullback in the Thursday session.
Stock markets also got a boost from crude oil futures, which surged 8% Wednesday, coming off 17-month lows as a Russian official predicted oil prices would stabilize in 2019.
Japan’s Nikkei 225 index NIK, +3.88% rebounded 3.8%. It had tumbled more than 5% on Tuesday before recovering slightly a day later. The energy sector was among the day’s biggest winners, as Inpex 1605, +4.28% , JXTG 5020, +8.06% , Fuji Oil 5017, +8.86% and Japan Petroleum Exploration 1662, +6.08% rallied. Nintendo 7974, +4.25% , Sony 6758, +5.51% and Fast Retailing 9983, +1.31% also posted solid gains.
Hong Kong’s Hang Seng Index HSI, -0.67% , which reopened after the Christmas holiday, gained initially but closed down 0.6%. Energy companies were again among the leaders, with CNOOC 0883, +0.51% , China Petroleum & Chemical 0386, -4.68% and PetroChina 0857, -0.21% rising about 2% or more. Tech stocks gained as well, with Sunny Optical 2382, +0.74% and AAC 2018, -0.78% advancing.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 26,544.63.
The projected lower bound is: 24,414.48.
The projected closing price is: 25,479.56.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with HANG SENG INDEX), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 40.5535. 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 41.05. 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 51 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 -85. This is not a topping or bottoming area. The last signal was a buy 0 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 12 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed down -172.500 at 25,478.881. Volume was 25% below average (neutral) and Bollinger Bands were 8% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 25,908.07 25,903.72 28,330.29
Volatility: 19 26 23
Volume: 1,488,167,040 1,739,376,256 1,880,077,312
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 10.1% below its 200-period moving average and is in an downward 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 bearish on .HSI and have had this outlook for the last 5 periods.
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