Hong Kong: HANG SENG INDEX (.HSI) Washington and Beijing are close to reaching an agreement

Hong Kong: HANG SENG INDEX (.HSI) Washington and Beijing are close to reaching an agreement

Hong Kong: HANG SENG INDEX (.HSI) Washington and Beijing are close to reaching an agreement

Asian stocks rose Monday after news reports said Washington and Beijing are close to reaching an agreement as early as this month to end their costly tariff war.

Benchmarks in Shanghai, Tokyo and Seoul advanced after Bloomberg News and The Wall Street Journal, citing unidentified sources, said China was offering to ease tariffs and other restrictions on U.S. farm, chemical, auto and other products. They said Washington would remove most sanctions on Chinese imports.

A deal might be completed in time to be signed by Presidents Donald Trump and Xi Jinping this month, the reports said. But they cautioned the two sides still were negotiating on the issue that sparked the dispute: Chinese plans for state-led creation of global technology competitors that Washington, Europe and other trading partners say violate Beijing’s market-opening obligations.

The battle between the two biggest global economies has rattled global financial markets for months. Investors worry it will weigh on global economic growth that already is showing signs of slowing.

“Speculation that both the U.S. and China are close to signing a deal will keep market players slightly upbeat,” Nicholas Mapa and Prakash Sakpal of ING said in a report.

The Shanghai Composite Index SHCOMP, +1.12% rose 2.6%, to its highest level since June, and the smaller-cap Shenzhen Composite 399106, +2.21% surged 3.5%. Tokyo’s Nikkei 225 NIK, +1.02% added 1.2%.

Hong Kong’s Hang Seng HSI, +0.51% advanced 1.1% and Seoul’s Kospi SEU, -0.22% was 0.3% higher. Sydney’s S&P-ASX XJO, +0.40% gained 0.5%. New Zealand NZ50GR, +0.66% and Singapore STI, +0.82% advanced while Taiwan Y9999, -0.38% retreated.

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 27,610.92.

The projected upper bound is: 29,778.49.

The projected lower bound is: 28,255.28.

The projected closing price is: 29,016.89.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white 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 49.0351. This is not an overbought or oversold reading. The last signal was a sell 3 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 67.70. 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 4 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 116.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 2 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 2 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 147.420 at 28,959.590. Volume was 55% above average (neutral) and Bollinger Bands were 32% narrower than normal.

Open High Low Close Volume___
28,855.10929,241.80128,760.67028,959.5902,765,926,400

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

Moving Averages: 10-period 50-period 200-period
Close: 28,708.21 27,194.42 27,644.09
Volatility: 10 18 23
Volume: 2,314,854,912 1,786,009,856 1,858,864,640

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 4.8% 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 32 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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