Towards All Time HighStart Buying. HSI at the start of at least multi month may be even years of uptrend.
HSIJ2021 trade ideas
Strong reversal but resistance remainsThose who hit the bullseye below previous swing low can book profit around 19k.
Bottom not in yet. More consolidation and lower prices to come over the next few days/weeks.
HANG SENG: Buy signal on the bottom of the Channel Down.Hang Seng got rejected on the 1D MA50 two weeks ago and is headed again to the bottom of the Channel Down pattern. The 1D timeframe turned red again on its technical outlook (RSI = 41.280, MACD = -221.700, ADX = 20.498) and this is becoming a buy opportunity again. Every prior rise inside this Channel Down has been at least +10.90% so the one that started on the August 22nd low isn't technically completed. Buy and attempt contact with the 1D MA200 (TP = 19,400).
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Breakout imminentHsi can breakout from this consolidation any moment now. If it breaks down then going Long below the previous swing low at 17500 is a no brainer. Give your trade some room as they may try to hit the SL below 16800.
If it breaks up then we will have to watch the resistance to higher prices to determine if the market has bottomed and is starting a big move up or if more accumulation needs to happen.
Accumulation continues. Volume is highest between 18000-18500. This is where most of the buying is happening. Expecting consolidation for few days, maybe whole of this month.
Short term trend remains DownMarket back between the blue lines as expected. Selling and buying both strong so expect some zigzag. Lower prices to come.
Go Long below one of these 2 lows.Rally from here may very well go on to make the new ATH. Go Long below one of the 2 lows and hold onto this one.
China's 5Y LPR remains unchanged, what does this meanOn August 21st, the 1-year Loan Prime Rate (LPR) was lowered from 3.55% to 3.45%, while the 5-year LPR remained at 4.20%. On August 15th, the Medium-Term Lending Facility (MLF) rate was lowered by 15 basis points (bp). The market had anticipated a 15 bp reduction in the 1-year LPR rate and a 20 bp reduction in the 5-year LPR rate. However, there isn't a clear correlation between the 5Y and 1Y LPR.
The unchanged 5-year LPR rate might imply that the expectations for a rapid and significant rebound in the real estate market in the second half of the year have been erased. A notable observation is that when clear signals of real estate stimulus policies are released, the reduction in the 5-year LPR rate tends to be substantial. Conversely, when real estate stimulus policy signals weaken, the reduction in the 5-year LPR rate falls short of expectations.
By keeping the 5-year LPR rate unchanged, it indicates that, under the overarching trend and context of a downward shift in the real estate market, the policy emphasis is not on stimulating new real estate sales demand. After all, the future of China's real estate will experience a trend distinct from the past three decades, and both supply and demand will gradually transition to a lower level. Whether it's the early repayment of residential loans by residents or the exposure of local debt pressures, they are both triggered by the decline in real estate sales, and debt pressures are transmitted step by step through financing channels. Compared to policies that stimulate the demand side, the main policy focus is on controlling debt pressures on the supply side. Mitigating the debt pressure triggered by the decline in real estate sales is the current policy priority.
The current situation still involves a process of interest rate centralization, and there is still room for downward adjustments in benchmark deposit and lending rates. The main breakthrough points for alleviating debt pressures lie in two areas: easing household debt pressures and resolving local debt risks. Both of these key actions are closely related to the adjustment of benchmark deposit and lending rates.
China's CPI effectIn July 2023, the year-on-year decrease in the Consumer Price Index (CPI) for residents in China was 0.3%, while the month-on-month increase was 0.2%. The Producer Price Index (PPI) for industrial producers in China showed a year-on-year decrease of 4.4%, and a month-on-month decrease of 0.2%.
The cyclical fluctuations in commodity prices similarly affect the year-on-year analysis of PPI, while the significance of the month-on-month change might be more important. Excluding base effects, the real economic scenario depicted by July's prices indicates a strong demand for services and lower-than-expected industrial production.
Amidst the backdrop of strong overseas commodity prices, July's domestic PPI continued to decline month-on-month, reflecting the persistently weak pattern of actual industrial production demand.
Looking at different industries, the prices in oil and gas extraction, nonferrous metal, and smelting and processing industries shifted from decline to increase month-on-month due to the impact of rising international oil and nonferrous metal prices. However, industries more reflective of domestic industrial production demand, such as coal maintained negative growth month-on-month, contributing to the negative PPI reading. This aligns with the weak construction industry PMI data for July.
In downstream industries, computer manufacturing and smart consumer equipment manufacturing recorded month-on-month increases, indirectly verifying the resilience of China's middle and high-end manufacturing exports. Recent export research indicates that some companies still have confidence in overseas demand and their competitive advantages for the second half of the year, and the negative impact of trade frictions on exports is gradually diminishing
As expected, the year-on-year inflection point for PPI occurred in July, indicating a potential price increase for industrial products. Historical data show that PPI inflection points generally lead those of industrial product inventories, and PPI trends align with the trends in inventory cycles, which indicates a strong indication of inventory cycles. Experience suggests that during the phases of passive destocking and active restocking, industries tend to experience an upward trend in industrial production and profitability. The market expects that after the bottom of the inventory cycle, the economy will undergo a cyclical recovery.
However, there are two distinct features of this inventory cycle. First, the elasticity of real demand during this inventory cycle is limited this year since China's inventory cycle is essentially a shadow of the real estate cycle. Second, PPI as an indicator of domestic industrial demand might experience a phase of "failure".
Stochastic and MACD HSI strategyStochastic and MACD HSI strategy. With Stochastic as main and MACD as filtering for singal noise
HSI 1 mont standard deviation rangeThis is helper indicator to show 1 to 2 standard deviation range of 1 month HSI based on VHSI
Bullish HSI Can Be Supportive For The KiwiNice bounce on HSI, looks like a bottom in 2022 because of an impulse up, now right shoulder at support. China is doing everything to support its economy, but with high rates in other major countries, they just cannot pick up that easily.
However, when economy in China will really start picking up that’s when commodity currencies like AUD and NZD can benefit. Also, recently China announced that they are in trade talks with New Zealand, so maybe NZD has also nice upside potential especially vs USD, now when FED can be close to end the hiking policy. Looking at NZDUSD chart, we can see slow price action and corrective wave structure after an impulse from the lows, which indicates for more gains in upcoming weeks/months.
HSI appears to be getting ready for mark up phaseYou can never tell for sure how much more they have to accumulate/distribute but signs are encouraging that accumulation phase is coming to conclusion and HSI is poised for a run to all time highs very soon.
Maximum Pessimism - Blood on street - what do you do ?There are more negative and pessimistic news about China every day in the papers, online and social media. Remember, be it print or clicks , the more viewerships , the more money they can make (capturing your data and then selling advertisments or relevant news back to you)
So who wants to hear positive and good news huh? It is boring and unsensational!
China is now brutally being punished by Europe, US and Japan on the chips market, cutting them off from exporting the advanced materials that China needs. Of course, the business owners like Nvidia is unhappy as China remains one of its core customers.
Post Pandemic recovery? People have forgotten after the 3 years lockdown, it takes time to put things in order. Many small business operators have closed shops, bankruptcies are at all time high including the big boys (Walmart and Carrefour closing many outlets in China). Domestic demand is not back yet to its pre- Covid days.
Covid-19 has disrupted the world economy , more so for China as it stays locked down much longer than most countries. If it takes 21 days to make a new habit, think 3 years. It has structurally altered many consumers' habits ,being forced to stay at home. Their mindset has changed, their risk appetite is different being more conservative and cautious than before, worrying if a similar or worse pandemic might occur again.
A weakened yuan , a badly battered stock market which left a distaste in many analyst downgrading China economy and losing confidence. The property market still remains in a doldrum with many smaller developers hanging carrots to lure customers.
China is so fragmented that just looking at the Tier 1 cities performance is not conclusive as this are highly dense populated cities with great infrastructures , amenities and opportunities that continue to attract the lower tiers to come venture into.
The investment climate seems gloomy at the moment for China and other than Russia, it seems irrational to invest in China now. I do not hold a magic wane and able to predict the future of China but I believe in the story of China for the long haul.
I have long advocate the importance of diversification and that includes geographically, by sector, by asset class, by time horizon and investment objectives.
I hope in the next coming weeks or months, there will be some economic stimulus by the CCP to shore up the economy. It is important to note that not all sectors will grow strongly as CCP will continue to invest in places that are of strategic importance to its country, protecting its national security and achieving common prosperity for its people
Not a terrible place to place a bet.I see that we have held support, and were going back for a retest. I don't know how close we get, but if it touched into the baby blue box below, I think that's a great risk reward for a long position.
China is beaten down, fudded, this very well could be the bottom.
If it goes lower than the support, you probably want nothing to do with it till we see it above once again.
Hang Seng: Thumbed 👍Exemplarily, Hang Seng has thumbed our target zone and turned upwards from there. Thus, we classify wave 2 in turquoise as complete. Now, wave 3 in turquoise should carry Hang Seng above the resistance at 21 056 points. The counter movement of wave 4 in turquoise should then push the index back toward this mark before the ascent can be resumed once again. However, there is a 39% chance that Hang Seng could interrupt the current upwards movement, shifting southwards to develop the new low of wave alt.2 in turquoise, which should then be established before the support at 17 948 points.
HANGSENG Expected To Continuously Rise
1D - Retested the previous long-term downward trend line (red circle) and is rising again, and a falling wedge pattern is also underway.
Currently, the downward trend line (blue circle) that began on Jan. 30, 2023 has broken through, with only 19725 support likely to rise to 21047-21752/22400-2260.
1W
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I think there will be a warm wind in the Chinese market in the second half of this year.
HSI UpdateHSI went oversold again.
China goes down, Bitcoin goes down. BTC seems like it's trading along with China for the past month.
Probably a weak bounce tonight, China has been very bearish lately.
HSI UpdateIndicators don't show a direction, but I get a weird feeling China will get another pop tonight.
BTC has been tracking the Chinese market for the past month, so be careful if you're still shorting shitcoin.
HANG SENG: Inverted Head and Shoulders aiming for the 2021 High.Hang Seng is supported on the 1W MA50 with technicals both on the 1D and 1W time-frames (RSI = 51.130, MACD = 75.500, ADX = 25.377) neutral. This shows the high accumulation effect that is taking place as the huge Inverted Head and Shoulders pattern (whose Head formed the October bottom) is near to complete the Right Shoulder. Even though there are several Resistances on the way to the February 2021 High (R4 = 31,160), Inverted Head and Shoulders patterns technically target Fibonacci 2.0 from the neckline and that is at 30,900, just a fraction under the 2021 High. The action now is a buy (TP = 30,900).
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Hang Seng Index Volume and Price Action analysis - longThe Hang Seng Index shows a strong accumulation in the background along with a strong upward breakout. Before Friday's session and US labor market data to be released today, Hang Seng again showed strength and formed a re=accumulation range.
The last re-accumulation zone becomes both a big support and a buying zone for today's session.
Analysts expect good data from the US and big players seem to be setting the market for this data.
With the background we have on this chart, only longs should be considered
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VolumeDayTrader!
Bias more on upside for HSI with 3 signal30th April 2023
Closed above 20k, above 61.8% Fibo and 200days MA are good sign of bullish for HSI.
Resistance: 21k
