Hong Kong: HANG SENG INDEX (.HSI) stocks hit near 4-week high as China steps up support

Hong Kong: HANG SENG INDEX (.HSI) stocks hit near 4-week high as China steps up support

Hong Kong: HANG SENG INDEX (.HSI) stocks hit near 4-week high as China steps up support

Hong Kong stocks rose to the highest level in almost four weeks on Monday as Beijing stepped up policy stimulus to cushion the economic impact from the coronavirus outbreak.

The Hang Seng index closed up 0.5% at 27,959.60, after touching its highest level since Jan. 22. The Hang Seng China Enterprises index gained 0.9%.

The sub-index of the Hang Seng tracking energy shares rose 0.1%, the IT sector gained 0.7%, the financial sector ended 0.4% higher and the property sector edged up 0.2%.

The People’s Bank of China cut the interest rate on its medium-term lending on Monday, paving the way for a reduction in the country’s benchmark loan prime rate (LPR), which will be announced on Thursday. **

China’s securities watchdog has loosened refinancing rules for listed firms by scrapping profitability requirements for private placements on start-up board ChiNext.

The number of new cases of coronavirus in China’s Hubei province rose on Monday after two days of falls.

Sentiment was aided as the Chinese workforce returned after an extended holiday, and as companies found ways overcome quarantines that curb the epidemic and limit business activity.

Shares of ANTA Sports Products Ltd rose 5.1% after the company said 40% of its stores in the mainland have re-opened. China Evergrande Group hit a near one-month high after it sold nearly 50,000 properties worth 58 billion yuan ($8.32 billion) in three days of online sale.

China’s main Shanghai Composite index and the blue-chip CSI300 index rallied on Monday and erased all their losses from the steep plunge two weeks ago, triggered by fears of the coronavirus outbreak.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.2%, while Japan’s Nikkei index closed down 0.7%.

About 1.41 billion Hang Seng index shares were traded. The volume traded in the previous trading session was 1.45 billion.

At close, China’s A-shares were trading at a premium of 24.59% over Hong Kong-listed H-shares.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 28,921.57.

The projected lower bound is: 27,058.22.

The projected closing price is: 27,989.90.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 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 80.9797. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 8 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 55.16. 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 sell 29 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 106.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 9 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 4 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 144.000 at 27,959.600. Volume was 10% below average (neutral) and Bollinger Bands were 45% wider than normal.

Open     High      Low     Close     Volume___
27,766.71128,055.58027,766.71127,959.6001,412,999,168
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 27,451.48 27,679.99 27,317.75
Volatility: 17 22 20
Volume: 1,846,576,640 1,612,553,984 1,663,192,960

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.

Summary

HANG SENG INDEX is currently 2.3% above its 200-period moving average and is in an downward trend. Volatility is high 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 13 periods.

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