- The Hang Seng Index trades above the 20-day and 50-day moving average levels, indicating that the near-term momentum remains bullish.
The Hang Seng Index (INDEXHANGSENG: HSI) closed Monday’s session up by 0.92%, gaining 225 points to snap a four-session losing streak. The gains are underpinned by rising confidence of the return of more accommodative trade relationship between China and the United States, and the rising prospect of an interest rate cut by the Federal Reserve in the third quarter of the year. China and the US are in advanced stages of their trade negotiations, with the world’s top two economies reportedly narrowing down to rare earth minerals and fentanyl.
Hong Kong’s other indicative indices, including the Hang Seng Tech and Hang Seng Enterprise index both closed Monday’s session with a bullish candle, underlining the return of a positive sentiment in the market. The Hang Seng Enterprise Index is generally considered as a measure of the performance of the China mainland economic activity, and its 1% gain is a welcome signal of the near-term growth outlook.
At its current level, the Hang Seng Index trades above the 20-day and 50-day moving average levels, indicating that the near-term momentum remains bullish. However, stronger recovery by mainland equities could shift the attention from Hong Kong, especially for dual-listed stocks like Alibaba, Tencent and China Mobile. The Hang Seng Index has gained about 24% year-to-date, outperforming mainland China’s benchmark CSI 300 Index, which has gone up by just 3%. However, multiple large-cap mainland indices are set for release in the medium-term, and that could tilt the scale and shift the momentum.
Hang Seng Index Prediction
Hang Seng Index pivots at 24,570 points and action above that level will favour the upside to prevail. The first resistance will likely be at 24,810 points. However, an extended control by the buyers will break above that level and could send the Index higher to test 25,000.
Conversely, going below 24,570 points will signal control by the sellers. If that happens, the index will likely find primary support at 24,400 points. Breaking below that level will invalidate the upside narrative and could send the index lower to test 24,210.
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