Hong Kong: HANG SENG INDEX (.HSI) up on late rally, Xiaomi leads tech stock surge
Hong Kong stocks ended with gains after a late rally on Wednesday but investors kept an eye on developments in the China-US trade talks with Washington due to impose fresh tariffs on Chinese goods within days.
The Hang Seng index gained 0.8 percent, to 26,659.
It was a good day for handset-linked stocks, with AAC Technology surging more than 5 percent to become the winner among blue-chips. Sunny Optical rallied 1.2 percent.
Xiaomi soared over 8 percent after the launch of its 5G smartphone.
On the mainland, the Shanghai Composite Index ended with moderate gain, up 0.2 percent to 2,924 while the Shenzhen Composite Index ended down 0.4 percent, to 1,639.
Other Asian markets mostly rose. Sydney gained 0.7 percent. Seoul, Singapore, Taipei and Manila were also well in the green, with Mumbai starting on an upbeat note.
But Tokyo finished 0.1 percent lower, with Bangkok also down.
Chinese and US negotiators are still trying to hammer out a mini agreement and the mood on trading floors remains upbeat, while most observers are confident the two sides will eventually reach a deal, which has fed a global equities rally for weeks.
The uncertainty weighed on the market. Still, Asian markets reversed early losses to sit in positive territory in the afternoon.
“The fact the two sides are negotiating is a positive sign, as it’s when both sides are locked in a stand-off without communication, then traders get nervous,” said David Madden at CMC Markets UK.
On currency markets the pound tumbled against the US dollar after a fresh poll predicted UK Prime Minister Boris Johnson’s ruling Conservatives would win a much smaller majority than a previous projection.
The YouGov opinion poll said the Tories would win Thursday’s vote, with a majority of 28 seats, sharply down from the 68 forecast in a similar study at the end of November.
“The margins are extremely tight and small swings in a small number of seats, perhaps from tactical voting and a continuation of Labour’s recent upward trend, means we can’t currently rule out a hung parliament,” YouGov political research manager Chris Curtis said..
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 26,716.43.
The projected upper bound is: 27,428.80.
The projected lower bound is: 25,884.18.
The projected closing price is: 26,656.49.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
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 81.9594. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 4 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 50.33. 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 23 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 -1. This is not a topping or bottoming area. The last signal was a buy 3 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 8 period(s) ago.
Rex Takasugi – TD Profile
HANG SENG INDEX closed up 208.811 at 26,645.430. Volume was 13% below average (neutral) and Bollinger Bands were 48% 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: 26,443.10 26,667.43 27,616.50
Volatility: 17 18 19
Volume: 1,419,032,960 1,493,024,512 1,743,312,000
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 3.5% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 14 periods.
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