Uncertain Week (2011-02-28 HSI analysis)

This week would be somehow uncertain. Technical analysis on both daily and weekly chart doesn't give much hints to us. Let's see what I got this week.

Daily chart:


Hang Seng Index managed to get back above the red long-term up-trend line at the end of last week. However, it just dropped back below it. We could treat the breakout as a false one.

After almost touching the few-days low, HSI surged which gave a long white candle last Friday. It was stopped by the Moving Averages.

Good thing is MACD has turned it head upwards, leading to potental bullish cross. But we have to wait till it's confirmed.

We could expect small resistance at around 23,300 give by those moving averages, and strong one given by the red uptrend line, which is at around 23,600.

The downside will be at around 22,400. Breakdown of this level will lead HSI to the next support at around 21,600.

Weekly chart:


HSI fell below the red up-trend line for a consecutive of 3 candles. This could somehow be a confirmed breakdown. If you are more conservative, we can observe it for one more week.

We can see that the index was twice supported by the 50-day Simple Moving Average in past three weeks. Could it keep on be a strong support in this coming week? I guess not.

MACD is moving downwards and has no evidence of turning the way round.

I would have a bearish bias on the market in this coming week. Resistant should be at around 23,600.

Good luck.

Important Economic Data this week (2011-02-27)

28-Feb (Monday)
21:30 Canada GDP (4Q) {Forecast: Increase from 1.0% to 2.9%}

01-Mar (Tuesday)
11:30 Reserve Bank of Australia Rate Decision {Forecast: Unchange}
16:55 Germany Unemployment Change {Forecast: Unchange}
18:00 Euro CPI Estimate {Forecast: Unchange}
22:00 Bank of Canada Rate Decision {Forecast: Unchange}

02-Mar (Wednesday)
08:30 Australia GDP

03-Mar (Thursday)
20:45 European Central Bank Rate Decision {Forecast: Unchange}
21:30 US Change in Non-farm Payrolls {Forecast: Big increase}
21:30 US Unemployment Rate {Forecast: Slight increase}

Strategy for short-term trading on CSCL (2011-02-24 2866.HK)

2011-2012 Budget announced a series of plan to help ease the property markets, leading the rise of stock prices of property companies. I have made wrong predictions yesterday but TA on the chart will not lie.

Today I am gonna post my analysis on one of the shipping companies: CSCL (2866.HK). It appears to be quite attrative to buy this stock, anticipating a bounce of around 10% in short term.

Daily chart of 2866.HK:


I have identified a long-term up-trend line shown in red. Stock price has never been below this line since the low in May 2010.

This line can be treated as a very powerful support. Stock price touching this line can somehow be expected to bounce.

Price of CSCL now is 3.4, it still hasn't intercepted with the uptrend line. The support is at around 3.30.

MACD just dropped through 0-level, and there won't be much obstacle to the bounce due to momentum of the stock price.

Therefore, when the stock price hits 3.30, it is definitely a buy signal. The upside resistance is at around 3.60, which is around 10% of profit. Of course, you have to set your own stop loss point.

If you would like to buy it now, then stop loss point should be at just below the red trend-line. Upside target is the same, so it is around 6% profit and 4% loss, around 1:1 risk/reward ratio.

Event-driven (2011-02-23 New World Development Co. Ltd. analysis)

I guess the focus today would be 2011-2012 Budget announced by the government at 11:00am. It would definitely do some impact on the stock market. One of the topics is of course the property market in Hong Kong. So I check one of the largest property companies in Hong Kong --- New World Development Co. Ltd. (0017.HK). With the new taxes suggested by many experts and organisations, the budget is expected to have a negative influence on these property companies.

Daily chart of New World:


New World Development has been dropping along the red down-trend line for a few months. Though there were two peaks, but eventually the stock price slided downwards.

I have identified two trend-lines for this stock, as shown in red and green. The former one is a short-term and the other is a longer one.

The stock price is currently testing the long-term trend-line. There is a support at around the level of 13.5.

However, I would expect the stock price to drop below this level. The red line would probably stop the price from continuing its plunge. Therefore, support level is at around 13.2.

Volume shrinks a lot, showing a lack of confidence by investors. MACD is at a low level now, and there is no sign of forming bullish cross.

Announcement of Budget 2011-2012 will be a great event today. News trader would have to keep track of the policies announced.

Strong bullish trend (2011-02-22 EUR analysis)

Above is the 4-hour chart of EUR/USD. We can see that after Euro touched the horizontal resistant two days ago, it fell and apparently could not break this level.

The good news is Euro has ended its downwards trend (within the blue and red down-trend lines) and broke this channel from below 4 days ago. This suggests a strong bullish trend for EUR.

It is currently rising along the green up-trend line. This provides great support to this currency at around 1.364.

We will have to see whether it could break the resistant at around 1.37. And the next resistant will be at 1.386. These are the two major levels to be aware of in near future.

What would be next? (2011-02-21 HSI analysis)

After two days of rest, we could finally stop and assess carefully that whether HSI would continue its consecutive rise.

Let's see the charts of Hang Seng Index for this week.

Daily chart of HSI:


After falling below the up-trend line (in red) for few days, the index finally got its way back above the line. This indicates a false breakdown.

However, it is currently testing a short-term down-trend line (in purple). This would not be a very strong resistant, but certainly provides some power to stop the index from keep rising.

MACD just crossed its EMA from below, which signals a bullish market. Volume breakout further enhances the bullish momentum.
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Weekly Chart:


Hang Seng Index still hasn't surged back above the long-term up-trend line on weekly chart. This is a bad news.

I have indentified a short-term channel within which the index was being traded. The next resistant level would be at around 24,000.

For the downside, apart from the red line, 50-day SMA is also one of the supports as it was two weeks before. The next support level would be at around 22,600.
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To conclude, the index is testing resistance in both daily and weekly charts. Good thing is there is bullish cross of MACD and EMA in daily chart; on the contrary, it needs so much power and momentum to surge through the resistances.

If HSI keeps on surging, which is not too likely in coming few days, next resistance level would be at around 24,000.

On the other hand, 50-day SMA is the support for HSI suggested on weekly chart, which is at around 22,600.

Important Economic Data this week (2011-02-20)

22-Feb (Tuesday)
10:00 Reserve Bank of New Zealand 2-Year Inflation Expectation
21:30 Canada Retails Sales (MoM) {Forecast: Drop from 1.3% to -0.1%}
23:00 US Consumer Confidence {Forecast: Increase}

23-Feb (Wednesday)
17:30 Bank of England Minutes

24-Feb (Thursday)
21:30 US Durable Goods Orders {Forecast: Increase}
23:00 US New Home Sales (MoM) {Forecast: Drop}

25-Feb (Friday)
17:30 UK GDP (QoQ) {Forecast: Unchange}
21:30 US GDP {Forecast: Slightly Increase}
22:55 University of Michigan Confidence {Forecast: Slightly Increase}

source: http://www.dailyfx.com