Hang Seng Rallied 2.7%
Editor’s Note: As always, we would appreciate any feedback you have. It will help us make this app more useful to you.
Hang Seng Index rallied 2.7% on lower and below-average volume this week with four up days in a row. The index declined on Monday but regained momentum then thanks to the lower-than-expected CPI of the US, which reignited the hopes on more rate cuts from the US. Hang Seng Index retook its 100-DMA, while Hang Seng Tech Index advanced 5.1% and recouped all moving averages. In addition, China’s Q4 GPD rose 5.4% y/y, beating market consensus of 5.1%. Retailing sales growth and the export growth in December also surprised the market. Finally, the finance data were better than market consensus, indicating stronger liquidity in the market.
The US market recovered this week, with S&P500, NASDAQ, and Dow Jones indexes recorded strong gains, after the US Fed signaled sooner rate cut after the lower-than-expectation CPI and PPI numbers of December. S&P500 and Dow Jones indexes recouped the losses of previous week. US CPI number rose 2.9% y/y in December, in line with consensus. Core CPI grew 3.2% y/y, lower than consensus of 3.3% y/y. On monthly basis, US core CPI rose only 0.2% m/m, lower than consensus of 0.3%. The NASDAQ index retook its 50-DMA, while S&P 500 and Dow Jones indexes tested their 50-DMA resistances. The market has pulled back since the middle of December as the market expected slower pace of rate cut. We are looking forward the major indexes retaking their 50-DMAs and holding above these levels to be constructive.
The CSI 300 rose 2.14% on lower volume over the past five sessions. The market condition remains in a Rally Attempt (Day-3).The index is trading above its 100-DMA (3,765; -1%), which serves as the immediate support. The second support lies at its 200-DMA (3,637; -4%). The index faces immediate resistance at the 21-DMA (3,862; +1%), followed by the second resistance at the 50-DMA (3,922; +3%).Overall market sentiment was still tepid as the daily turnover remained around RMB 1.2T. China released largely better-than-expected credit and macro data of December FY24. The country announced its 2024 GDP growth to expand 5.0%, meeting its target. The Q4 GDP grows 5.4% y/y, beating market forecast. We recommend investors stay patient and take a disciplined approach to adding risk.
Leading stocks advanced this week. The average stock in the MarketSmith Hong Kong 33 rose by 0.9% for this week. Our Hong Kong Model Portfolio fell by 2.2% for this week (see details in the Model Portfolio section). Since June 20, 2013, the Hong Kong 33 is up 578.85% vs. a 2.7% down for the Hang Seng.
The best performer in our Hong Kong 33 was TCL ELECTRONICS(01070), it’s a leading developer and manufacturer of smart screen products. The stock gained 13.6% this week. EPS rating stands at 68, RS rating of 94, and A/D rating of B.
Our Hong Kong Market Status are in an Rally Attempt.
Hang Seng Index bounced off its 200-DMA with lower volume after hitting a new low since September 2024. It recorded four upticks out of five trading sessions this week. The next resistance was at its 100-DMA and then 50-DMA. Southbound HK-China Connected witnessed net inflow of HKD42.7B. Market sentiment improved but the index still faces pressures at its 50-DMA. We would like to see the index to retake and hold above this level to be constructive. Stay patient and follow our rules to pick up stocks with strong fundamental and technical profiles.
What do you think? Please email us any questions or comments.
Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.
published on January 17, 2025