Hang Seng Gaps Lower On Anti-Extradition Bill Protest | HSI
Matt Simpson June 11, 2019 10:47 PM
Protests in Honk Kong has seen the Hang Seng Index lead the way lower, after an already weak lead from Wall Street.
With the Hong Kong government set to vote on the controversial extradition bill, demonstrators have taken to the streets, with organisers claiming over a million people have attended. With the city coming to a slowdown, it’s weighed on the domestic equity market which now leads the way lower in Asia. Technically, it’s correction could be nearing an end after a rebound this month.
The minor rebound has met resistance at the 27,845 low and failed to test a cluster of resistance just above 28,000, which comprises of the 38.2% Fibonacci level, 50, 100 and 200-day eMA. Given a 38.2% retracement is considered as acceptable, its failure to reach this far is a testament HSI’s weakness whilst other APAC stocks extend their gains.
The market gapped lower and extended losses, meaning today’s open price is currently the daily high. If the index can close beneath 23,790 it confirms an evening star reversal formation and suggests the corrective high is in. Furthermore, global benchmarks such as the S&P500 appear stretched over the near-term and suggest a retracement could be due and, if global sentiment sours this will provide another headwind for the index and suggests it could break to new lows.
Should the index hold above 27,155 and recycle higher, we’d continue to look for areas of weakness below the resistance cluster just above 28,000. And, as the trend remains bearish below 28,500, we’d only seek bullish setups on the daily following a break of this key level.
Over the near-term, sentiment for HSI is clearly being driven by domestic issues, therefore it remains vulnerable to updates around the protest. Beyond this, we need to assess global sentiment and the general stock market direction but, ultimately, let price action be our guide.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.