INVESTMENT DAILY

The Hang Seng Index is expected to trade at 27,700 to 28,200today.

    Hong Kong market maintained momentum on Monday. HSI opened higher andgained strong momentum in the afternoon. It rallied 744 points to close at 28,016.

    HSCEI also gained 603 points to close at 14,590. Market turnover reportedHK$263.6bn. HKEx (388 HK) benefited from increasing turnover, the countersurged 19% to be the best performer of blue chips. CSR (1766 HK) and CNR (6199)advanced 17.7% and 16.7% respectively.

    US stock market continued its recent strength, opening higher on Monday. However,investors concerned about the impact of strong US dollar on multi-national corporateearnings, as well as effect of weak oil price on oil companies, US stock marketreversed early strength. The Dow and the Nasdaq closed 81 points (to 17,977) and 8points (to 4,988) lower respectively. Besides, US dollar continued its recent strength,US Dollar Index once hit 100 on Monday and closed at 99.5.

    Hang Seng Index overcome 28,000 with hefty turnover, reflecting that marketmomentum remaining strong. However, as the Index is substantially overbought, weexpect to see short term profit taking pressure, suggest to Accumulate duringweakness.

    Technical Analysis.

    Hang Seng Index closed with white candle on Monday. Technically, market sawresistances at high level, couple with MACD bullish gap expanded, showing thatmomentum future turned stable. Hang Seng index first support would be gap level of26,248, while next support would 25,640. For resistance, 28,300 would become thefirst resistance, while next resistance would be seen at 28,500.