HSI dominated by bears dragging the market lower throughout the day
Hong Kong Hang Seng Index (HSI) Technical Analysis Report for Nov 08, 2019 | by Techniquant Editorial Team
HSI ended the week 2.03% higher at 27651.14 after losing $196.09 (-0.7%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (HSI as at Nov 08, 2019):
Friday's trading range has been $312.27 (1.12%), that's above the last trading month's daily average range of $251.53. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HSI. Prices continued to consolidate within a tight trading range between 27534.91 and 27900.80 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Regardless of a strong opening the stock index closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
The market closed back below the 200-day moving average at 27751.21. When this moving average was crossed below the last time on August 1st, HSI lost -2.35% on the following trading day. Hang Seng found buyers again today around 27582.29 for the third trading day in a row after having found demand at 27534.91 in the previous session and at 27547.77 two days ago.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 26978.65.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 27900.80 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 27534.91 where further sell stops could get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Hang Seng. Out of 76 times, HSI closed higher 60.53% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after four trading days, showing a win rate of 52.63% with an average market move of 0.06%.
With four out of the other six Major World Indices closing higher today, the ones that stand out on the positive side are NDX gaining 0.44% and NKY closing 0.26% higher. On the flipside the worst performers have been FTSE closing -0.63% lower and DAX losing -0.46%. Read more