Hong Kong Hang Seng Index (HSI) – More Downside

The Hong Kong equity market has a strong bullish run last month in the first three weeks before a pull back last week. The HSI surged to as high as 15,977.13 points but fell 1,422 points or 8.9 percent to close at 14,555.11 points on Tuesday. On-month, the HSI is up 435 points or 3 per cent. The better-than-expected corporate results in the US have created confidence in the market for investors to continue buying shares. However, trading volume has started to decline slightly compared to the volume in March. Investors are being more cautious because the market has already climbed 24 percent from the low of 12,125.80 points in March.


Daily HSI chart as at 28 April 2009 using NextVIEW Advisor. Click on chart for larger view.

The longer term moving averages (60- and 90-day moving averages) have increased slightly last month indicating a bullish trend and the strength of the trend is still considered strong because the momentum indicators are still in convergence with the HSI. The averages are currently between 13,500 and 13,800 points. At current level, the HSI is still overbought until it comes back to the averages. Therefore, expect more downward movements in the markets this month unless the HSI breaks above the 15,900 points resistance level.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.