Two very important announcements took place over the week which was China coming up to pledge support for the markets and Fed announcing rate hike and the future hikes that is to come. All in all, it was a crazy week as market saw a nice recovery throughout.
Paying a little more attention to this particular market as China has come up to pledge support for the market and would soon wind down on the regulatory front. It also pledge help to support companies listed overseas as delisting concerns sent HK tech stocks plummeting through the week. This also came on the back when JPMorgan China Internet analysts Alex Yao and team said this sector is “univestable” for the next 6-12 months. And before you know it, the market rallied over 16%. =)
So, how Hong Kong Market bottomed? That’s the question we’ve been getting throughout the week. In a nutshell, nobody knows BUT with further investigation, we can probably see a change in trend to the upside and these are some of the points for us to see if it has bottomed.
- Moving Averages , a good way to tell a trend is by looking at the moving averages. For now, we can see that the 50ema is still above the 20ma which still signal a downtrend. WAITING for a crossover of the 20 over the 50 for a confirmation in trend change.
- News of China supporting the market on Wednesday which might now help to build a base around the 18200 mark.
- For a sign of market bottom, a re-test near the low would show sign of strength and this could then provide a higher low in the making.
- Also the next bounce up should be higher than the 20ema of around 21550 to provide a higher swing high.
When we see these in play, we would then be more confident of a market bottom.
On a side note, don’t be too obsessed in finding the bottom as we all KNOW by now, nobody can find that bottom. Once might be lucky and the good old dollar cost average AND proper allocation into individual stock. So no real point in mentioning hey, i managed to grab Alibaba at HKD$73 or Tencent at $300. If you consistently are able to do that, PLEASE give me a call, you got my number. =)
Like an naggy parent, invest into QUALITY stocks and even with a downfall, you can still sleep in peace at night. UNLESS you have wrongly allocated into a stock then you probably won’t sleep that well.
We’re pleased with our alerts on the Singapore market for the last 2 months even though HK & US were down, we managed to achieve a high 90% accuracy in our alerts to our clients. With fed increasing the interest rate, it is no surprise that LOCAL BANKS have moved up after the announcement. We’re glad we have positioned our clients for this ride once again.
Electronic stocks are also looking for a rebound but we will want to be nimble for these stocks. More upside for our STI might be seen from the chart above.
For more analysis on the US market and where it might head to, you can click HERE
Have a good week ahead!