HK - Market Direction 01 (Jan 12 - Jul 15)

[winston]

DJ MARKET TALK: BNPP Picks 10 China Wealth Effect Beneficiaries

0842 [Dow Jones] BNP Paribas says its analysis into China's wealth effect leads to a positive stance on the cyclical plays in the consumption-related space, including branded discretionary consumers, developers with strong cash positions and execution, as well as financial institutions with strong retail franchises or distribution capabilities, which it believes will be the potential winners over the coming one to two years.

"We handpick 10 names here as the best China wealth effect plays"; they are Intime (1833.HK), PCD Store (0331.HK), GOME (0493.HK), China Resources Enterprise (0291.HK), Mengniu Dairy (2319.HK), Longfor Properties (0960.HK), Agile Property (3383.HK), China Merchants Bank (3968.HK), ICBC (1398.HK) and China Pacific Insurance (2601.HK).

Source: Dow Jones Newswire

[winston]

Chart resistance on the Hang Seng Index is seen at 21,725.7, the top end of a gap that opened up between Aug. 4 and 5 last year, which it briefly tested on Monday.

"We will see trade remain in the current range for a while longer after the recent rally.

Investors are going to be more cautious, picking names that are likely to benefit from Chinese policy moves in a slowing growth environment," said UOB Kay Hian's Shanghai-based head of research Wang Aochao.

Source: Reuters

[winston]

DJ MARKET TALK: New Bull Market Set For China Equities - UOB

1538 [Dow Jones] UOB KayHian says "a new bull market is getting set" for China equities, as key ingredients for a sustainable bull run in China stocks are falling in place.

These include rising global liquidity as key central banks in the world print money and inject much liquidity into the system; this bodes well for emerging markets in Asia as they show stronger economic growth vs key developed markets; "should the Fed do a QE3, the situation will be even more favourable."

UOB adds, the improving global economic outlook is another positive, while the valuation of H-shares are compelling, with risk premium standing at 9.75%, substantially above the average of 4% in the past 11 years.

Source: Dow Jones Newswire

[winston]

SHCOMP's move above 2400 w/ increasing turnover (+45% DoD, +92% from 30-day avg) is a strong indication that retail investors who have stayed away from mkt for long time is finally coming in.

The new account opening data from last week, +18.8% HoW at 4-month high, is also supportive of this;

Our A share strategist, Hanfeng Wang also turned more positive for near-term.

Higher than expected property sales is the key reason for his more positive view. He also upgraded IT, electronic components and shipping sectors to Neutral.

The small-mid cap screen in his report is also interesting as they are most likely the front runners if retail continue to participate.

Source: GS

[winston]

Hong Kong to Rally After Golden Cross: Technical Analysis

Feb. 23 (Bloomberg) -- The Hang Seng Index may extend its climb after forming a “golden cross” pattern this week, a bullish sign that should help the gauge overcome signs of overheating, according to Nomura Holdings Inc.

The measure’s 25-day moving average climbed above its 200- day moving average on Feb. 20, forming a so-called golden cross for the first time since August 2010.

The Hang Seng Index has rallied 17 percent in the past seven weeks, extending its longest run of gains since October 2010, on signs the U.S. economy is improving, bets China will ease monetary policy and optimism Europe will contain its sovereign-debt crisis.

“The golden cross is a very bullish sign,” said Tacky Cheng, a Hong Kong-based technical analyst at Nomura Holdings Inc. said in a telephone interview yesterday. “The momentum is quite positive for this rally to continue.”

The last time a “golden cross” pattern occurred between the 25-day and 200-day moving averages of the benchmark Hang Seng Index, on Aug. 13, 2010, the gauge advanced 19 percent to a two-year high on Nov. 8 of that year.

This year’s rally has driven the gauge’s 14-day relative strength index, a measure of momentum, to about 73 as of yesterday, exceeding the threshold of 70 that indicates to some traders it’s overbought. The index slipped 0.8 percent to 21,380.99 today, snapping a two-day gain.

The advance may slow in the next two to three weeks since short-term technical indicators show the market could be overbought, Cheng said. “This near-term consolidation will be very limited.”

H-Share Rally

The Hang Seng Index may then climb toward the next resistance at 21,700 points, Cheng said. That level provided firm support in June and July 2011.

The rally in Hong Kong shares will also be powered by rising Chinese shares, Cheng said. The Hang Seng China Enterprise Index, a gauge of mainland shares traded in Hong Kong known as the H-Share index, had a “golden cross” last week when the 25-day moving average climbed above the 200-day moving average, data compiled by Bloomberg show. The H-Share Index has climbed 18 percent this year.


http://www.businessweek.com/news/2012-0 ... lysis.html

[winston]

Phase 2 of new HKEX trading hours is effective on 5 March (next Monday).

Pre-opening session : 9:00am – 9:30am
Morning trading session : 9:30am - 12:00pm
Afternoon trading session : 13:00pm – 16:00pm
*** Lunch break : 12:00pm – 13:00pm (1 hour break) ****

[winston]

Watch the 21,000 mark in the Hang Seng Index.

Any close below this level with rising turnover is not a good signal.

You may need to raise more cash.

Source: Dr Check, The Standard HK

[kennynah]

they are following nyse/cme/nasdaq style

why need lunch break for?

Phase 2 of new HKEX trading hours is effective on 5 March (next Monday).

Pre-opening session : 9:00am – 9:30am
Morning trading session : 9:30am - 12:00pm
Afternoon trading session : 13:00pm – 16:00pm
*** Lunch break : 12:00pm – 13:00pm (1 hour break) ****

[winston]

DJ MARKET TALK: Earnings Revision Likely Next Catalyst For HSI

1525 [Dow Jones] A case could be made that the HSI's rally in January and February had been largely driven be mean reversion and risk-on, a powerful combination that drove the HSI's 17% run so far in 2012.

But for the rally to stay or extend, next up would have to be fundamental improvement leading to better corporate earnings--in other words, positive earnings revision to support a multiple expansion.

All in all, while many investors' expectations that the HSI may have to pull back in March may be legitimate given Hong Kong market's best start in 20 years, as long as the earnings revision is biased upward, don't expect a big pullback or prematurely declare a death of the rally.

Source: Dow Jones Newswire

[winston]

The Hang Seng Index slid 1.3 percent yesterday to close at 21,265, near its short-term support level - the 20-day moving average of 21,240.

Any close below this level will draw more selling pressure and the index will easily test the 50-day moving average, currently at 20,041.

So be patient.


Source: Dr Check, The Standard HK