Hang Seng rising on positive indicators

Tensions from the Occupy Central movement has largely abated as police made headway in clearing the Mong Kok protest site and arrested top student leaders.

Hong Kong protest
Source: Bloomberg

While we did see some pockets of street clashes, the situation is now under control.

As business goes back to normal and consumer sentiment returns, this will be a positive for the markets.

Hong Kong stocks opened flat yesterday, but rallied over the day and is in line with China A shares. This saw the Hang Seng close 1.12% higher, at 24,111.98 points – breaking above the key resistance level of 24,000 points.

 

Ahead of the Hong Kong Open

Will we see Hong Kong shares hold on to their gains and stay above the 24,000 point level?

A range of indicators suggests:

 - From a technical perspective, the Hang Seng Index has broken above the 20DMA over the past week, which suggests an upside bias in the short-term.

 - Also on the daily chart, the 50DMA looks poised to cross back above the 200DMA. This will be one-to-watch as it will be a bullish indicator of momentum.

 - Another positive signal is seen from the MACD crossing above its signal line, which indicates an upward bias in the interim and a buy call.

 - Looking at the index constituents, 79% of them are above their 20DMA (vs 63% the previous session) and 77% are above their 50DMA (vs 72%).

We will be watching out for the Hang Seng, or Hong Kong HS50, to test the uptrend line formed since October.

On that basis we are calling for Hong Kong HS50 to open higher by 0.32% at 24236 points.

Click to enlarge

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Een artikel zoeken

Form has failed to submit. Please contact IG directly.

  • Ik wens per e-mail informatie van IG Group bedrijven te ontvangen over handelsideeën en IG's producten en diensten.

Voor meer informatie over hoe wij uw gegevens mogelijk kunnen gebruiken, bekijkt u ons Privacy- en toegangsbeleid en onze privacy website.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.