INVESTMENT DAILY
The Hang Seng Index is expected to trade at 22,800 to 23,200today
Hong Kong market was lack of momentum and makret turnover also retreated. Themarket was encouraged due to signals of relaxing policy as People’s Bank of Chinafurther lowered repo rate in the morning session, HSI once gained 267 points at most,however, it headed south in the afternoon and dropped 95 points to close at 23,048.
HSCEI also dropped 30 points to close at 10,255. Market turnover postedHK$62.5bn. Both premier Li and Zhou Xiaochuan said China can fullfill the targetof about 7.5% economic growth in German economic and technical cooperationforum and IMFC, respectively. We expected more stimulus and a rebound of 4QGDPgrowth, which will also improve investors confidence.
Citi quarter result is better than expectation, its share price performed well onTuesday and led the US stock market to rebound on early session. However, oilprice declined triggered selling pressure on oil related stocks, while JP Morgan andWells Fargo share price dropped after release its quarter earnings, US stock marketerased most of its gain in late session. The Dow closed 6 points lower (at 16,315)while the Nasdaq still rebounded 14 points (to 4,227). Besides, owing to a series ofnegative factors, oil price dropped another US$3.9 to US$81.8 per barrel.
Although US stock market declined sharply recently, investors expectation on USinterest rate hike has been eased. It will provide support to local market. Besides,fourth plenary session will soon be held, we expect HK stock market to range tradeat current level.
Technical Analysis
Hang Seng Index closed with inversed hammer on Tuesday, Technically, indexclosed at below 250DMA (23,178), couple with the MACD bearish gap maintained,showing that momentum remained weak. Hang Seng index first support would beearly October’s low of 22,556, while next support would be seen at 22,000. Forresistance, 10DMA (23,204) become the first resistance, while next resistance wouldbe seen at 20DMA (23,627).
