Hong Kong: HANG SENG INDEX (.HSI) US-China trade war back in the spotlight

Hong Kong: HANG SENG INDEX (.HSI) US-China trade war back in the spotlight

Hong Kong: HANG SENG INDEX (.HSI) US-China trade war back in the spotlight

Overnight on Wall Street, stocks closed lower following a Bloomberg News report that said the United States is preparing new tariffs against all remaining Chinese imports if trade talks between Presidents Donald Trump and Xi Jinping fail to reconcile the ongoing trade dispute.

Both countries have already implemented levies on billions of dollars worth of each other’s goods.

“The trade war between the US and China looks set to escalate over the next few months and its overall influence on global markets remains as one of the most important factors influencing investor sentiment,” Rakuten Securities Australia said in a morning note.

“Investors will continue to monitor the situation closely over the coming sessions and indeed in the run up to next year as the two biggest world economies bash heads and the fall out hits the rest of the world,” they said.

For investors, the value of Monday’s report is that it offers clues to the timing of the next step in the trade war, according to one economist.

“That the remaining $257bn (give or take) of Chinese exports to the US would eventually be subject to tariffs if no trade deal was found, is not news. We have known this for months. What we did not know exactly, was when these would be implemented. Now, it looks like we can pencil in some rough dates into the calendar,” Robert Carnell, ING’s chief economist and head of research for Asia Pacific, wrote in a Tuesday note.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 26,934.81.

The projected upper bound is: 25,585.69.

The projected lower bound is: 23,484.79.

The projected closing price is: 24,535.24.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is 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 9.4741. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 11 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 31.32. 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 11 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 -130.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -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 sell 17 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed down -226.510 at 24,585.529. Volume was 14% above average (neutral) and Bollinger Bands were 27% wider than normal.

Open High Low Close Volume___
24,765.11924,939.18024,540.63124,585.5292,165,347,840

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 25,233.73 26,802.31 29,401.78
Volatility: 25 25 23
Volume: 1,990,384,384 1,905,365,632 2,147,409,152

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 16.4% 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 moderate flows of volume out of .HSI (mildly bearish). Our trend forecasting oscillators are currently bearish on .HSI and have had this outlook for the last 17 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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