Hong Kong Exchange (388.HK) Extends Its Upmove On The Improving Market Sentiment
Medion Jim July 6, 2020 6:59 AM
Hong Kong Exchange (388.HK) jumped 9% last week, while China's Shanghai Composite index soared 6.5%. Overseas investors would use Hong Kong Exchange's stock connection to invest China's market. The northbound capital inflow to buy China's stock accumulated to 160 billion yuan for the week ended July 3, comparing the outflow of 67.9 billion yuan in March.....
Hong Kong Exchange (388.HK) jumped 9% last week, while China's Shanghai Composite index soared 6.5%. Overseas investors would use Hong Kong Exchange's stock connection to invest China's market. The northbound capital inflow to buy China's stock accumulated to 160 billion yuan for the week ended July 3, comparing the outflow of 67.9 billion yuan in March.
In the below chart, Shanghai Composite index, as shown on the weekly chart, broke above the long term trend line, indicating that the sentiment of the China market is turning bullish.
Source: GAIN Capital, TradingView
Except for the increase of capital inflow for investing Chinese market, Hong Kong's stock exchange is also benefited from the returning of Chinese stocks from the U.S. market. The stock already touched the 2nd resistance level as mentioned.
From a technical point of view, the trend of the stock remains strong as the prices are trading around the record high level on the daily chart.
The RSI is above its overbought level at 70, but has not displayed any reversal signal.
Bullish readers could consider to place the nearest support level at HK$322 (the high of June 24), while resistance levels would be located at HK$375 and HK$405.
Source: GAIN Capital, TradingView
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