HONG KONG STOCK FORECAST #78800788 CHINA TOWER
TAICHI BOTTOM SIGNAL appears on 9/10/2020.
Look forward it breaks above the downtrend line.
Hang Seng HSI
HSI OverboughtHang Seng FUtures overbought on 3 and 4 hr charts.
When will this strange global pump end....
Chart of the Day: HSI1! break down from consolidation wedgeHSI peaked in 2018 and has been in a downtrend marked by persistent lower highs and lower lows.
With 40+ odd days to US elections, expect more craziness out of Trump and China to push back by flexing its revitalized military. Anybody else noticed how most of the Chinese Wushu/war shows in recent years have featured Chinese fighting foreigner oppression? The Americans are preparing for a cold war but the Chinese are preparing for a hot war. China has got to be thinking about the ABCD encirclement of Japan in the 1930's and the Plaza Accord; Both stories did not have a good ending but there weren't many options on the table back in the 1930's and 1980's.
It is tough for HK to deal with a triple whammy of internal turmoil, Corona virus and a trade war. For now, it is helmets on and, especially for my HK friends, to stay safe and hang on tight.
Trying to make sense of volumeCovid 19 crash saw huge volume on 20 straight days. While volume reflected on intraday time frames was higher than average, it was no way near as much as the cumulative daily volume shown on a Daily chart. Upon noticing similar thing happening in last 5 days, i dig it up a bit and found this, " Charts that utilize a periodicity of "Daily" will show a different quantity of Volume when compared to charts that utilize an intraday periodicty like 1 minute or 1 Day*. This is caused by the fact that certain types of trades, such as block trades, spread trades and market trades, are considered by the exchange when reporting the cumulative daily volume for a specific symbol or contract. However, those trades are not represented in the tick or 1-minute intraday data for the symbol. These trades together make up the difference observed between the daily volume and the sum of the intraday volume. ".
Notice how the price is stuck between the high of the first day and low of the last of those huge volume days, surely not a coincidence. I have a theory but my knowledge is very limited. You can read more about block trades here www.investopedia.com and try to make sense of things.
Current setup is very similar to the one prior to the covid 19 crash and the end of June. Accumulation observed on the intraday while big blocks reflected in cumulative daily volume. One crashed, the other rallied. Which one will it be this time? Pre covid setup came after distribution and a selloff whereas end of June was after accumulation and a rally.
I will be updating here during the rest of the week. Pls share your thoughts.
Accumulation ContniuesHSI isn't very popular on this platform as i rarely use to get 100 views on my posts but last week post was close to 500 so many of you were checking back as i was updating in the comment section during the week. I will post once on the weekend from now on and update in the comment section during the week as things develop.
Couple of things i want to put forward. I only trade HSI and there is rarely a day when i don't trade but i can't tell you every trade where to enter or exit. I am just sharing with you what i see in the market at that particular moment. How you trade that is entirely up to you. Please don't ask me where is the bottom/top or i bought here, sold here, will market go up or down. I don't know. You don't have to know any of it to trade. Every moment in market just like each individual is unique. You yourself have to come up with a strategy which best suits your personality. I am just giving you a second opinion.
Coming back to HSI, price spent majority of the week zigzagging between 24500-200. Thursday close looked really convincing for a gap down on Friday morning but it open up instead and concluded the week on a dull note. What it tells me is that they are not done here yet.
Looking at the close, it appears that gap down and selloff on Monday is less likely. If Market goes back up to the selling zone 24700-800, it will offer a good opportunity to short. More often than not, price will go below the accumulation range in a trap move before reversing. Therefore, it is best to wait till it goes down to 23900 or possibly even below 23500 before deciding to go Long.
During the accumulation, down moves are sharp whereas up moves appear laboured. Market has to look weak for dumb money to be on the short side in order for smart money to accumulate, vice versa during distribution. Having said that, i also believe that being on the short side until the very end of accumulation is the right way to trade as long as you are selling from the top of the accumulation range and taking profits in the middle or near the bottom. Do not expect every trade to be a big winner. Market spends vast majority of time range bound. Knowing when market is in the range and when it is about to trend requires understanding of market structure which can only come with time, discipline, dedication and perseverance.
Ideas, suggestions, questions are welcome.
Regards
China Unicom: Too cheap to ignoreWhen momentum stocks are running a little too hot, it is always good to take a look at some value names. China Unicom is so cheap that I had to double check the figures to be sure:
-> 0.47x P/B, c.-2x standard deviation
-> c.7.9% forward real earning yields, -2x standard deviation
-> EV/EBITDA of 1.5x , -2x standard deviation
it pays a divy yield of 3% and the price trend has turned positive.
HSI Rising Wedge PatternHang Seng Index (HSI) has started a rising wedge pattern since March 2020.
It has just broken the wedge pattern last Friday, closing low than 24814.
See if the breakdown is confirmed in the next 2 trading days.
If it goes back to the wedge, look for a SHORT at 26050 level in October.
The Risk / Reward Ratio is 1:5.6
Target: 21500 (Some main long term trend line support)
Stop Loss: 26850 (Above previous high)
Insight into the thought processAs i am getting a lot of questions, i decided to present the thought process of my recent analysis. I hv very little PC knowledge so i can't present analysis in a very professional way. If you have any question, i will be glad to help.
Hang Seng UpdateFUtures red because CHina dumped but it looks like they're going to bounce next week.
Don't expect China to drop the market any further, in fact, they're usually good at pumping when their market goes up.
HSI Bear patter from 2018This is a prediction of HSI trend since 2018 using Wave Theory.
It was a complicated A wave with 5 waves inside caused almost 2 years.
A1 - Oct 2018
A2 - Apr 2019
A3 - Jul 2019
A4 - Jan 2020
A5 - Mar 2020 (the global pandemic concern)
Rebound from A5, It completed a B wave in 4 months.
BA - Apr 2020
BB - May 2020
BC - Jul 2020
Rapid rebound and completion of B wave, strong and quick correction C wave could be expected.
Personally it could be seen in Q4 2020.
Critical Level:
1st target: ~21139
2nd target: ~16800 - 17000
Last target: ~13300
Monday to Gap down?Will we see an opening gap on Monday to the downside?
It's all setup really nicely. If it does, i don't expect it to get filled anytime soon. Move down should accelerate from there onward.
ATM, i see very little bullish case to support the idea of Gap or the parallel channel acting as a support for another rally.
Resistance now at 24750-850.
HSI - to bounce or to break?The Hang Seng Index had a boosting rally a couple of weeks ago, but lost its hold at the top of the channel and had been working its way down slowly since. Unlike the STI, the HSI appears relatively stronger given the environment and situations it has been in, particularly over the past year and a half.
It is a t the lower end of the channel, and candlesticks indicate a slight push down to test the support, followed by a bounce, and a likely fail about two or three weeks later... the downside fallout could come earlier, but there is little now to trigger it, albeit a surging COVID-19 cases in the territory.
Ominous weeks to follow, watch for bounce or failure.
Elliott Wave View: Hang Seng Index Correction In ProgressHang Seng 15 minutes chart below shows that the index has extended lower from July 7 peak. The decline is unfolding as a double three Elliott Wave Structure. From July 7 high, wave W ended at 25570.36 low. The bounce in wave X ended at 26103.84 high. The pair then extended lower in wave Y, which ended at 24766.17 low. This completed wave (W) in larger degree. The decline reached the blue box area, which is the 100 – 123.6% extension of wave W-X. From that blue box, the Index did a 3 waves bounce in wave (X), which ended at 25772.41 high. The bounce unfolded as zig-zag Elliott Wave Structure.
Afterwards, the Index continued its decline and broke below previous wave (W) low. This confirms that the next leg lower in wave (Y) is already in progress. Down from wave (X) high, the index extended lower in wave A and ended at 24526.91 low. Wave A low ended at 61.8-76.4% extension of wave (W)-(X). From there, the index is currently doing a bounce in wave B. While below 25772.41 high, the bounce in 3,7 or 11 swings is expected to fail. The index then can do another leg lower in wave C before ending wave (Y) in the larger degree. The 100-161.8% extension of (W)-(X) where (Y) can end is between 22486-23743 area.
HSI DOUBLE TECHNICAL INDICATOR CONFIRMATIONUsing confirmation for both the Fibonacci retracement level and inverse head & shoulder, the strategy is potentially robust enough to cover both bull and bear situation.
Strategy:
1. if moving toward resistance 1 and breakthrough, can long targeting resistance 2 using support 1 as a potential stop-loss point.
2. if moving toward support 2 and breakthrough, can short targeting support 3 using support 2 as a potential stop-loss point.
Note: This idea is simply speculation and does not indicate any recommendation nor take any responsibility.
Coming Down NicelyAfter the Buying Climax on 7th of July, brief distribution was carried out between 25950-26250.
Today saw a gap down and a selloff to first of the 4 unfilled gaps below which is acting as a support for time being.
Key resistance above now is 25850-950.
Move down so far appears to be in a channel formation.
Major chunk of distribution took place between 24500-300 since the low in March. Gap through that will signal the start of a markdown and accelerated move towards 20k and below.
Regards
I am "Mr Invincible"Do you love money ? I think you and I do but the Chinese really loves money.
Two things that really make them rich, I mean filthy rich in China. One is property and the other is the stock market. And they are risk takers though not necessarily prudent in managing risks.
They do not hold back when they think or feel this is the time to go all in. Read article here
I lived in Singapore and thus far I have not heard about the government encouraging the people to put money in the stock market, directly or indirectly. Not China, not USA and maybe some other countries.
Let's take a look at the chart. Both SHCOMP and China A50 which I posted my views ( here and here )
Both are up about 30% from the bottom in March 2020 while Hang Seng Index (HSI) is only up about 17%, which offers more potential for upside.
Again, I advocate prudent risk management. I have said and shown through various indices, stocks in Hang Seng and China that I bought that showed good profits. There is no need to ask your friends for money, go to bank and borrow nor sell your house and sink the whole kitchen into the stock market. This , to me is taking on too much risks, maybe not for others.
Average up slowly on each pullback and each time, stick to the 1-2% risk per trade rules. Avoid doubling or tripling your position sizes hoping to make money quicker and within a shorter time. Mr Market can be nice to us but it can also become nasty at a turn of events that you and I cannot know nor predict like the Covid-19.
In the words of legendary Warren Buffett- the first rule of trading is not to lose your money. That means at all time protect your capital. So guys, chill and not to think this bull run is going to be over soon and your fear of missing out cause you to go take on additional risks.
Think of your loved ones, family and even yourself. Always think what if I am wrong ? That is not being cowardly like some traders said but being RESPONSIBLE. Maybe, you think it is ok to go all in and worst case scenario, you just put in the extra hours to earn back the money.
But if you have dependants that need your income to pay the bills, education, rentals, etc, then it is wiser to think twice. Everyone situation is different, do the best you can without following others blindly. Such "all or nothing" mindset is taking things to extreme and is betting big on luck to be on their side.
Another thing is having peace of mind. If your portfolio is in the red, your life still goes on. But if it affects you so much then, you probably have weighed too much in and you need to pull back a little. Strike a balance.
May the blessings of God be with you.
1 Peter 5:8
