Hong Kong: HANG SENG INDEX (.HSI) uncertainty continues to swirl around the dispute

Hong Kong: HANG SENG INDEX (.HSI) uncertainty continues to swirl around the dispute

Chinese stocks were the world’s worst performers Tuesday, falling the most this month, and Hong Kong’s November rebound came unstuck.

The CSI 300 Index slid 2.3 percent, with technology shares leading declines after another sell-off in the U.S. That also dragged on Hong Kong’s Hang Seng Index, which lost 2 percent as all but two of its 50 members declined. Internet giant Tencent Holdings Ltd. retreated 3.3 percent.

Investors in China have been stung by a myriad of factors this year, including a trade war with the U.S. that has helped send the equity benchmark down 20 percent. Uncertainty continues to swirl around the dispute and whether any progress will be made when presidents Xi Jinping and Donald Trump meet on the sidelines of the G20 in Buenos Aires.

Traders in Hong Kong have barely had a moment of calm in 2018. Tuesday’s decline was the 15th time this year the benchmark has lost 2 percent or more, the most since 2011. Last year, drops of that magnitude happened only twice.

The losses show how most problems afflicting global investors in 2018 have found a foothold in Hong Kong. Its largest companies generate the majority of their sales from a slowing China, while the city’s dollar peg ties it to tightening U.S. monetary policy.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 26,985.04.

The projected lower bound is: 24,650.26.

The projected closing price is: 25,817.65.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 4 falling windows in the last 50 candles–this makes the current falling window even more bearish.

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 82.0287. 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 48.73. 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 26 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 -2. This is not a topping or bottoming area. The last signal was a sell 8 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 down -531.660 at 25,840.340. Volume was 32% below average (neutral) and Bollinger Bands were 9% wider than normal.

Open High Low Close Volume___
26,043.51026,132.28925,776.22125,840.3401,243,092,736

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

Moving Averages: 10-period 50-period 200-period
Close: 25,955.70 26,233.19 28,948.18
Volatility: 23 28 24
Volume: 1,536,997,504 1,937,305,216 2,049,193,472

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 gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
HANG SENG INDEX is currently 10.7% below its 200-period moving average and is in an upward 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 bullish on .HSI and have had this outlook for the last 3 periods.

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