The Daily Chart Shows the Hang Seng Index is at a Critical Level

The Hang Seng is up by 0.45%, becoming the best-performing index in Asia. The index is trading at $25,176, which is slightly above the intraday low of $24,995. Other indices in Asia are down, with the Shanghai composite falling by 0.70% while the KOSPI is down by more than 0.45%. In Australia, the ASX is up by just 20 basis points.

China set to retaliate

The Hang Seng is gaining today as China prepares to strike back against the United States. In a statement yesterday, the US said that it was forcing China to close its consulate in Houston. The State Department accused the consulate of helping stealing of American intellectual property. In a rejoinder, China asked the US to rescind this decision.

According to the South China Morning Post, China is preparing to close the strategically-important consulate in Chengdu. This is an important consulate that covers the Southwestern region, which includes provinces of Sichuan, Yunnan, Guizhou, Tibet, and Chongqing. According to the paper, this is one of the most American consulates in China because of the vast region it covers.

Tensions between the two super powers have been rising in recent months as the US economy continues to suffer. Trump has blamed the Chinese of not being transparent about the disease that has killed more than 140,000 Americans. As a result, the tensions risk putting pressure on the trade deal that was reached in January.

The Hang Seng is also reacting to news that HKEX is planning a tech-focused index that will include most tech companies in the exchange. This index, which will aim to rival the Nasdaq, will have companies like Alibaba and Tencent. The evolution shows how the Hong Kong exchange is evolving from an overall real estate play to a technology giant.

Hang Seng top movers

Most companies in the Hang Seng are in the green today. The biggest mover is AAC Technologies, whose shares have moved up by 13%. Other top movers are Sino Biopharmaceuticals, Sunny Optical, China Mengniu Dairy, and HKEX, which have jumped by more than 2%.

On the other hand, real estate stocks are the worst-performing. Wharf Real Estate, WH Group, China Unicom, Swire Pacific, and SHK Properties have dropped by more than 1.5%.

Hang Seng technical analysis

The Hang Seng index is trading at $25,132. On the daily chart, the price is above the 50-day and 100-day exponential moving averages. The price is also above the 50% Fibonacci retracement level. Also, it is above the ascending trend line that joins the lowest levels on May 25 and June 20.

Therefore, at this stage, the outlook of the Hang Seng is neutral. A move below the intraday low of $24,969 will mean that bears have prevailed. This is an important price because it is at the intersection of the 50-day and 100-day EMAs and the ascending line.

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