Hang Seng Index Technical Analysis | Hang Seng Index Trading: 2019-09-20 | IFCM UAE
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Hang Seng Index Technical Analysis - Hang Seng Index Trading: 2019-09-20

Contraction in private sector bearish for HK50

Hong Kong’s private sector contraction continued in August. Will the HK50 decline?

Recent Hong Kong economic data were weak: retail sales decline accelerated: 13% over year in July versus 7.6% in June. And the August reading of purchasing managers index was below 50 again, indicating contraction in the private sector. Activities in private sector contracted for the seventeenth straight month as new orders dropped due to a record fall in new business from mainland China, pointing to weakness ahead too. The slump in activities is being attributed to US-China trade tensions, as well as protest related disruptions. Continuing decline in activities in private business sector is bearish for HK50.

HK50 falling below MA(200) 09/20/2019 Technical Analysis IFC Markets chart

On the daily timeframe HK50: D1 is retracing lower after a rebound following the decline to 8-month low in the beginning of August.

We believe the bearish momentum will continue after the price breaches below the lower Donchian boundary at 26322.10. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian boundary at 27340.40. After placing the pending order the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop-loss level (27340.40) without reaching the order (26322.10) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

PositionSell
Sell Stop Below 26322.10
Stop loss Above 27340.40

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Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

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