INVESTMENT DAILY

The Hang Seng Index is expected to trade at 26,500 to 27,000today.

    Hong Kong market retreated on Monday amid concerns. HSI opened lower by 185points and extended losses then, it further dropped in the afternoon followed A sharemarket to close at 26,862, down 419 points. HSCEI also dipped 361 points to close at13,623. Market turnover decreased to HK$ 111.6bn. Chinese shares declined broadly.

    “one road one belt” concept stocks and recent hot sector like China banking andinsurance stocks retreated. Bank Comm (3328 HK) and CRRC (1776 HK) tumbled3.6% and 5.1% respectively.

    U.S. stocks fell on Monday, weighed down by the latest setback in bailout talksbetween Greece and its European creditors. Couple with U.S. industrial productionunexpectedly fell in May, Industrial output fell 0.2 percent after a revised 0.5 percentdrop in April, the Federal Reserve said on Monday. The Dow and the Nasdaq closed107 points (to 18,791) and 21 points (to 5,029), Gold price surged US$6.6 toUSD1185.8 per ounce.

    Hong Kong stocks market volatile on uncertainties, such as debt negotiationsbetween Greece and its EU and IMF lender, couple with market are eyes on USfederal meeting. Additionally, the A share 25 IPO this year will freeze massive fund,thus limited the upside potential of A share market. Investors stay sideline, thus, theconsolidation of Hong Kong stock market will continue, with initial resistance of27,000.

    Technical Analysis.

    Hang Seng Index closed with black candle on Monday. Technically, market droppedbelow 27,000, coupled with MACD bearish gap expanded, showing that momentumturning weak. Hang Seng index first support would be 26,574, while next supportwould be 26,000. For resistance, 27,000 would become the first resistance, whilenext resistance would be seen at 10DMA (27,198).