Breaking News yesterday (28-11-2009 HSI analysis)

Dubai Debt May Be Higher Than $80 Billion, UBS Says (Update1)

By Anthony DiPaola and Chris Bourke

Nov. 27 (Bloomberg) -- Dubai, the Persian Gulf emirate whose state-run companies are seeking to defer debt payments, may owe more than the $80 billion to $90 billion in liabilities assumed by investors, UBS AG analysts said.

“Perhaps Dubai’s debt includes sizeable off-balance sheet liabilities that imply a total debt burden well above the $80 billion to $90 billion markets have estimated so far,” Dubai- based real estate analyst Saud Masud wrote in a note. “This could imply that the debt issued by Dubai in recent weeks is insufficient to meet upcoming redemptions."

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Following the news, there were a large decline in the global markets mainly due to the great drop of banks stocks which led to everyone's fear about the future stock markets. HSI could not avoid going downwards on Friday, however, there is a question that everyone would like to know the answer: will this stop here and rebound? or would this news lead to great drop just like bursting a bubble? Let's see the below chart:

We can see that HSI has still not yet penetrated through the Ichimoku cloud. It still shows that the upward-trend has not yet been reversed. However, we still have to wait as it may go further downwards on Monday which may break the cloud. If HSI really drops below 21000 and has no signals of retrieving, please sell most of your stock as the trend has changed to downward-trend.

Drop in Bank stock? (21-11-2009 ICBC analysis)

Stocks in Banking Industry have been dropping greatly these few days after crazy rise in the past month. It seems that the industry is under correction. The below graph is the analysis on ICBC 1398.HK. We can see that after touching the middle uptrend line, the price went downwards, breaking-through the 10-day moving average and aiming at the lower uptrend line.



The first support is at the 20-day moving average which is $6.6. And the second support would be at $6.5 which is the lower uptrend line. The strategy is that if the price reaches 6.6, you can buy in the stock, but not with all the amount you are willing to invest, as some can be left to buy if the price fell till 6.5. Afterwards, some should be sold at around $6.9 to lock profits and we can anticipate a much higher rise till around $7.5, which was the previous highest point in 2007 Q4.

Sinopec Corporation (18-11-2009 0386.HK analysis)

Let me record my analysis on a stock rather than index/forex for the first time. And this stock is Sinopec Corporation 0386.HK.



We can see that 7.256 is a very strong resistant for the rise for the stock, as it had been blocking the rise for three times. However, the base for each drop after the block has been climbing upwards and forming the up-trend line. It would be likely that the stock price breaks the obstacle and has a great rise. Together with the fibonnaci fan, which suggests that the price has been supported by the middle line and would go up to the highest line, it is quite clear that we have to buy this stock.

On the other hand, Sinopec Corp. has fallen behind the HSI (in the one-year analysis). And the clear relation, though not very tight, with crude oil future is also a sign as everyone predicts that crude oil future would keep on rising with gold as a result of the weakened dollar.



The expected price is at around 8.0 and expected return is 16%.

Europe Economy Recession has come to an end (13-11-2009 EURUSD analysis)

Europe’s Economy Emerges From Recession on Exports (Update2)

By Simone Meier

Nov. 13 (Bloomberg) -- The euro-area economy emerged from its worst recession since World War II in the third quarter as exports from Germany and France helped compensate for households’ reluctance to increase spending.

Gross domestic product in the economy of the 16 nations using the euro rose 0.4 percent from the second quarter, when it fell 0.2 percent, the European Union’s statistics office in Luxembourg said today. Economists had forecast the economy to grow 0.5 percent, according to the median of 34 estimates in a Bloomberg survey.

Europe’s economy is gathering strength after governments stepped up stimulus measures and the European Central Bank injected billions of euros into markets to encourage lending. While confidence in the economic outlook is at a 13-month high, rising unemployment, the expiration of stimulus plans and a surging euro are threatening to undermine a recovery.

“The euro-zone economy has officially turned the corner and that is cause for relief, but not celebration,” said Martin van Vliet, a senior economist at ING Bank in Amsterdam. “The economy remains in a fragile state and is recovering mainly because of government stimulus and temporary inventory effects.”

The euro was little changed against the dollar after the release, trading at $1.4874 at 10:30 a.m. in London after rising as high as $1.4902 earlier today. The yield on the German 10- year benchmark bond dropped 0.2 basis points to 3.34 percent.

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After reading the above news about the end of the recession in Europe, we may make some expectation in future interest rates in Europe. As the economy still does not have much signals for recovery, we could not expect an increase in interest rate in a short time. After the news had been released, EURUSD had dropped a bit and this is very reasonable as the interest rate might not change in a short time. I have done an analysis on the EURUSD rate.

It looks like the rate is breaking down through the lower up-trend line, and aiming to go as low as the 50-day moving average, which has been a big support in these few months. To be a more careful investor, the strategy is to wait till the rate goes down to the 50-day moving average, which is around 1.4749, and we could hold long position. Afterwards, 1.504 is a very big obstacle and it would be a nice price to sell some to lock profits.

Everything is clear right now (10-11-2009 HSI analysis)

After days of fluctuations, with HSI touching 65-day moving average line and rebounding, it seems that it is very clear that HSI would be rising up crazily.

Gold has gone beyond $1,100/ounce, and dollar is sliding after G-20 agreement to maintain economic stimulus efforts . As a result, the economic would of course be better and we can predict that the stock market would be rising. If HSI is to be following the trend channel, it would go as high as 23,500. While everything tells us that we should be in long position, what are we waiting for before buying any stocks?

What a fluctuating market (03-11-2009 HSI analysis)

Following the news about CIT's bankruptcy, the stock market has been fluctuating so much that investors could hardly make correct predictions. At this moment, Dow Jones has gone up for about 1.19%. But I think I should focus on Hong Kong stock market first.

HSI was going down and then up and then down again for three trading days, touching the 50-day moving average twice. Together with a fibonacci projections, there would be a very strong support at around 21200. It seems like HSI could hardly drop through this point and it is more likely to rebound upwards along the uptrend channel.