Hong Kong: HANG SENG INDEX (.HSI) trading higher on reports China and the US have agreed on a plan to roll back additional tariffs in phases

Hong Kong: HANG SENG INDEX (.HSI) trading higher on reports China and the US have agreed on a plan to roll back additional tariffs in phases

Hong Kong: HANG SENG INDEX (.HSI) trading higher on reports China and the US have agreed on a plan to roll back additional tariffs in phases

Hong Kong stocks turned up in late trading Thursday on reports China and the US have agreed on a plan to roll back additional tariffs in phases, a potentially key development as the world’s two largest economies search for a way to end their trade war.

“In the past two weeks, top negotiators have had serious and constructive discussions on resolving issues of core concern. Both sides agreed to remove the additional tariffs imposed in phases as progress is made on the agreement,” Commerce Ministry spokesman Gao Feng said.

China markets, which close earlier, finished little changed.

“News saying that China and US have agreed to proportionally roll back tariffs on each other’s goods in phases is the main reason for the Hang Seng Index to bounce nearly 200 points in the afternoon suddenly,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.

The Hang Seng Index rose 0.57 per cent to 27,847.23, after spending the earlier part of the day under water.

In Hong Kong, another big winner Thursday was DaChan Food Asia, a chicken processor, which shot up 47.3 per cent to 67 HK cents, after announcing its profit attributable to shareholders jumped 241.6 per cent in the first nine months compared to the same period in 2018.

The Hang Seng’s heavyweights were mixed.

Technical Indicators

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 26,772.10.

The projected upper bound is: 28,608.60.

The projected lower bound is: 27,173.19.

The projected closing price is: 27,890.89.

Candlesticks

A white body occurred (because prices closed higher 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 23 white candles and 27 black candles for a net of 4 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 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 94.9429. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 13 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 72.02. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 56 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 142.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 13 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 18 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 158.590 at 27,847.230. Volume was 14% below average (neutral) and Bollinger Bands were 19% narrower than normal.

Open     High      Low     Close     Volume___
27,690.60027,900.80127,534.91027,847.2301,353,594,496
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 27,178.72 26,529.84 27,747.46
Volatility: 13 17 18
Volume: 1,522,230,912 1,586,858,496 1,772,005,248

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 0.4% above 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 5 periods. Our momentum oscillator is currently indicating that .HSI is currently in an overbought condition.

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