Hang Seng might be waiting for earningsHK50’s volatility has calmed down somewhat in the last fortnight as the initial reaction to news of fiscal stimulus seemed to be too aggressive. Sentiment has worsened somewhat: traders are wary of competition in technology between China and the USA regardless who wins the upcoming presidential election while property-related shares have struggled with doubts about the efficacy of stimulus.
Technically, though, this is a pretty normal reaction to major unexpected news, just over a significantly higher period. The Hang Seng has retraced about 50% from 7 October’s high and moved slightly into oversold based on the slow stochastic. It looks like a good entry for confident buyers but a more cautious trader might want to monitor the next interaction with the 50 SMA from Bands coming up in (probably) early-mid November.
Next week sees the releases of many critical earnings reports from Chinese companies, most notably banks. Even those not listed in Hong Kong will likely have some impact on HK50. Thursday 31 October is probably the most important day for the next direction of the Hang Seng.
This is my personal opinion which does not reflect the opinion of Exness. This is not a recommendation to trade.
