Reaching support zone (2011-06-13 HSI analysis)

After Trichet's talk about not changing the terms of Greek bonds, the worries about default by Greece were further enhanced, leading plunges of Euros. US Dollar rose, resulting in drop in commodities and stock markets.

Last week Hang Seng Index experienced another consecutive drops. reaching as low as around 22,300. This was within the support area I mentioned last week.

Daily chart of HSI:


On last Tuesday, we could see the HSI dropped below the down-trend line in red. Then it started to move lower.

Consecutive slumps were not a surprise. And we could expect support at around 22,350. This was shown by the longer lower shadow last Thursday, and the buying force there last Friday.

The bottom line should be at around 22,100. The index has been above this level since last September, and if it breaks down, it isn't hard to find HSI dropping below 21,000.

Good news is that the volume spiked despite of the lower levels. Investors are believing that the index would bounce after dropping to such a strong support.

The resistance is at around 22,800, due to the red solid line.

Weekly chart of HSI:


The chart looks a bit messy with lots of lines; however, they give us a lot of hints on how HSI is going to move.

Dotted lines (in green, red and blue) are relatively useless lines. Though the index dropped below the blue up-trend line, as we could not see many points on this line, it should be relatively weak.

Instead, green solid green appears to be the next support to the index on weekly chart. The level is as low as around 21,700. Not too far, but this also means that HSI falls below the horizontal area on daily chart. This should be bottom line.

Resistance is the same at around 22,800.

So this week pretty depends on the CPI announced in China which might signal change in interest rate, and how ECB is going to solve the financial problem in Europe.

Good luck.

Important economic data this week (2011-06-12)

14-Jun (Tuesday)
Bank of Japan Rate Decision {Forecast: Unchanged at 0.1%}
10:00 China Consumer Price Index {Forecast: Slight increase}
16:30 UK Consumer Price Index {Forecast: Unchanged}
20:30 US Advance Retail Sales {Forecast: Drop of 0.5% to -0.4%}

15-Jun (Wednesday)
16:30 UK Jobless Claims Change {Forecast: Drop from 12.4K to 6.5K}

16-Jun (Thursday)
15:30 Swiss National Bank Rate Decision {Forecast: Unchanged at 0.25%}
17:00 Euro-Zone Consumer Price Index {Forecast: Unchanged}

17-Jun (Friday)
21:55 U. of Michigan Confidence {Forecast: Slight drop}

Quick profits (2011-06-10 Tanrich Financial Holdings analysis)

Yesterday HSI was down again, but wasn't too much. We could see there was a strong buying force at around the support.

So is there any opportunity for quick money?

Daily chart of Tanrich Financial Holdings (0812.HK):


The principal activities of the Group comprise: wealth management, brokerage and margin financing, insurance agency, corporate finance, asset management, money lending, and proprietary trading. (from aastocks.com)

Starting from last September, this stock has surged from around 0.3 to almost 2.0 today! It's a great boost, isn't it?

However, following the long white candle yesterday, it attracted my attention to see whether it could keep its up-trend.

We can see that the price breaks the previous high, and closed at the high. This signals an extremely strong bullish force for the stock.

This might be a chance to grab some profits. If corporate investors who hold lots of shares want to push the price upwards, the price should at least be higher than the previous high for around 10%. But the risk is that they are going to sell after a sharp push, so we have to be absolutely careful. Set a stop gain, and leave quickly.

Good luck.

Anything happens next? (2011-06-09 VIX analysis)

Yesterday Hang Seng Index experienced another almost 1% slump, reaching the upper line of the horizontal area identified on Tuesday's post on daily chart, and breaking down the up-trend line on weekly chart.



Above is the daily chart of volatility index (.VIX). We could use it to predict the volatility of HSI too.

Red line is the very long-term down-trend line providing resistance force to the index. However, at this stage it seems not that influential.

Currently the trading range of VIX is broadening, indicated by the purple lines on the above chart. The support level is at around 17.

On the other hand, the three simple moving averages are converging together. This signals a larger movement as shown before as well, either to the upside or slump.

MACD is moving upwards slowly. This would probably tell us that VIX is going to surge instead of dropping. Would it break the upper purple line this time?

If it does, then the next resistance will be at the red line, at around 24, which is an extremely big movement by S&P. As the lower line is at an extremely low level, I don't think break down looks possible.

Maybe something's gonna be revealed.

Breakout (2011-06-08 GBP/USD analysis)

Above is the 4-hour chart of GBP/USD. From the chart, it seems like the pound is going to surge crazily again.

On the above chart, I have identified several lines. Most influential ones are the solid lines in green, blue and purple, but after the break out, the blue and purple lines are relatively useless at this stage.

The two green lines were resistances, and have become support now. These lines would be support when sterling retreats.

So this time I expect GBP to surge to the high in late April. Ultimate support would be at the horizontal blue line at around 1.630.

Good luck.

Hard to tell (2011-06-07 HSI analysis)

Following the end of my 1-week trip, my undergraduate study has come to an end. This indicates start of another life :)

Anyway, Hang Seng Index jumped last week above the trend line, but the great slump on Friday led the index to be back under the line. Let's check below.

Daily chart of HSI:


We could see that currently the index is still within the area between red down-trend and green up-trend lines. Obviously the sudden jump last week was not well supported.

Again, the green line and the horizontal area would act as support, which we could expect the index to bounce at around 22,500-22,600.

Red line should have a pretty strong resistance this time. 50-day simply moving average will help stopping HSI too.

Weekly chart of HSI:


On this chart, it is clear that the index is restricted within the area formed by red and green solid lines, even when there was long lower and upper shadows in past two weeks.

It is really hard to tell which way it would break. The only thing we know is that resistance is at around 24,500 and the support is at around 22,000 should it break out or down.

Important Economic Data this week (2011-06-05)

I am Back! Let's see what data would be revealed in this coming week.

6-Jun (Monday)
17:00 Europe Producer Price Index {Forecast: Slight decrease}

7-Jun (Tuesday)
12:30 Reserve Bank of Australia Rate Decision {Forecast: Unchanged at 4.75%}
17:00 Europe Retail Sales {Forecast: Increase}

8-Jun (Wednesday)
17:00 Europe GDP {Forecast: Unchanged}

9-Jun (Thursday)
05:00 Reserve Bank of New Zealand Rate Decision {Forecast: Unchanged at 2.5%}
07:50 Japan GDP {Forecast: Less Negative}
09:30 Australia Unemployment Rate {Forecast: Unchanged at 4.9%}
19:00 Bank of England Rate Decision {Forecast: Unchanged at 0.5%}
19:45 European Central Bank Rate Decision

10-Jun (Friday)
14:00 Germany CPI {Forecast: Unchanged at 2.3%}
19:00 Canada Unemployment Rate {Forecast: Unchanged}