Hong Kong : More volatility

The Hong Kong market made a good rally in the past one month especially in the last week of the month following the rally in the US. The HSI climbed 3200 points or 28% from the low of 11344.58 last month to the current level at 14,545.69 and is up for four consecutive weeks. HSI climbed 2,512 points or 20% on-month. The market is generally speculating the recovery in the economy amid better corporate earnings and economic data in the US. Trading volume has increased substantially this month as compared to its previous months.


Weekly HSI chart as at 3 April 2009 using NextVIEW Advisor. Click on chart for larger view.

The HSI has just broken above the longer-term 90-day exponential moving average is currently holding on the be above it. The rally has caused momentum indicators like the RSI and MACD to show positive signs and that the bulls have taken over in the short term trend. However, the Stochastic indicator is currently heavily overbought. The stochastic went below the 70 line a few days ago and went above it again. With stronger volume but lesser movement in the market, the HSI is expected to correct downwards in the early part of the month and may generally be in a volatile trading range this month between 12,500 and 15,000 points.

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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.