Technical Analysis HK50 : 2020-01-24

Recommendation:

Sell
Strong SellSellNeutralBuyStrong Buy

< 27563

Sell Stop

> 28374.1

Stop Loss

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Senior Analytical Expert
Articles 1465
IndicatorValueSignal
RSI Neutral
MACD Sell
MA(200) Buy
Donchian Channel Neutral
Fibonacci Sell
Fractals Sell

Chart Analysis

IFC Markets Tech Analysis

On the daily timeframe HK50: D1 is testing Fibonacci 38.2 level, above the 200-day moving average MA(200), which is declining.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 27563. A level below this can be used as an entry point for placing a pending order to sell. The stop loss can be placed above Fibonacci 23.6 level at 28374.1. After placing the 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 (28374.1) without reaching the order (27563), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Fundamental Analysis

Hong Kong economy performance has been deteriorating in recent weeks. Will the HK50 decline?

> Hong Kong economic data in the last couple of weeks were weak. Retail sales decline continued: sales declined 25.4% over year in November after 26.4% fall in previous month. The private sector contraction continued the 21st straight month in December. Businesses pessimism continued in the first quarter of 2020 though it eased. And unemployment ticked up to 3.3% in December from 3.2% a month ago. And couple of days ago Moody’s downgraded the territory’s credit rating. Deteriorating economic data are bearish for HK50.

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