INVESTMENT DAILY

The Hang Seng Index is expected to trade at 28,200 to 28,600today

    Hong Kong market maintained strong momentum on Mnday. HSI opened higher by184 points and once hit 28,589. Market gained momentum as it expected that Chinawill further easing its monetary policy. HSI rose 373 points to close at 28,434.

    HSCEI also gained 252 points to close at 14,741. Market turnover reportedHK$191bn. Sinopec (386 HK), Petro China (857 HK) and CNOOC (883 HK) rallied7.2%, 6.7% and 2.3% respectively as market expected a merger of the three leaders.

    Since the recent released US corporate earnings results overall speaking is betterthan expectation, US stock market continued to perform well in the early tradingsession on Monday. However, investors are not willing to increase its stock holdingahead of Federal Reserve meetings on Wednesday, profit taking pressure in latesession pushed the US stock market to close lower. The Dow and the Nasdaq closed42 points (to 18,038) and 32 points (to 5,060) lower respectively.

    The Hang Seng Index overcome 28,000, which extended its rally. However, as localmarket index future will be settled on Wednesday, together with the Fed will hold itsmeeting on the same night, we expect local market volatility to increase. Hang SengIndex resistance will move up to 29,000.

    Technical Analysis

    Hang Seng Index closed with a white candlestick on Monday, market turnover alsogoes up. However MACD bullish gap just flat only, showing that momentum hasnot substantially improved. Hang Seng index first support would be 28,000 whilenext support would be gap level of 10DMA (27,777),. For resistance, 29,000 wouldbecome the first resistance, while next resistance would be seen at 29,500.