Market News & Analysis


Top Story

Short Term Outlook of Hang Seng Index: Gap Up and Break the Trend line.

Hong Kong's Hang Seng Index jumped around 2% following the rise of the U.S. market last Friday. In Asia Pacific, Japan's Nikkei Index was up around 1.4% and Australia's ASX200 Index climbed around 1.7%.

China's central bank pledged "more powerful" policies to deal with unprecedented economic challenges caused by the Covid-19 pandemic. As Hong Kong's market is highly correlated to China, it would be positive news to the Hong Kong market also.

Investors should focus on China's April CPI (3.7% expect), PPI (-2.5% expect), industrial production (+1.5% expect) and retail sales (-6.0% expect) this week.

On a Daily chart, the index posts "Gap up" and breaks above the declining trend line drawn from January. It would be a very strong signal to call for the upward acceleration. Besides, the 20-day moving average is very close to the 50-day one. It is highly possible to indicate a bullish cross signal, which should enhance the positive outlook. In addition, the RSI is still heading upward, suggesting the upward momentum for the index prices.


Hence, as long as the previous low at 23600 is not broken, the index prices could consider a further upside to the resistance levels at 25000 (the gap occurred on March 12) and 26000 (the gap created on March 9).

Alternatively, a break below 23600 would erase the bullish outlook and test the support level at 22700.


Source: GAIN Capital, TradingView

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.