Hong Kong: HANG SENG INDEX (.HSI) the appetite for risk assets improve

Hong Kong: HANG SENG INDEX (.HSI) the appetite for risk assets improve

Hong Kong: HANG SENG INDEX (.HSI) the appetite for risk assets improve

Chinese and Hong Kong stocks capped their biggest weekly gain in two months, on prospects of an easing in trade tension and further loosening of monetary policies to stem a slowdown in growth.

The Shanghai Composite Index added 0.5 per cent to 2,999.60 on Friday, rising 3.9 per cent for the week. The Hang Seng Index rose 0.7 per cent to 26,690.76, advancing 3.8 per cent in the five-day period. Both the gauges posted their best weekly performances since June 21.Trading of derivatives on the city’s exchange resumed in the morning after a software bug triggered a half-day suspension on Thursday, with volumes of the futures contracts spiking. Hong Kong exchange’s website was also hacked on Thursday, said Charles Li Xiaojia, the bourse’s chief executive, at a press conference.

The appetite for risk assets improved as China and the US agreed to go back to the negotiating table next month to resolve the trade dispute and Premier Li Keqiang called for a timely use of policy tools, including cuts in banks’ reserve requirement ratios, to stabilise economic growth, at a cabinet meeting this week. A rally in US stocks overnight also boosted sentiment.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 27,513.68.

The projected lower bound is: 25,790.61.

The projected closing price is: 26,652.15.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black 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 89.0484. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 56.65. 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 14 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 141.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 17 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 13 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 175.230 at 26,690.760. Volume was 7% above average (neutral) and Bollinger Bands were 30% narrower than normal.

Open     High      Low     Close     Volume___
26,773.13126,790.78926,563.17026,690.7601,895,344,768
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 25,927.20 27,147.59 27,635.49
Volatility: 26 21 20
Volume: 1,897,941,248 1,590,277,760 1,783,432,576

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 3.4% below 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 29 periods.

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