INVESTMENT DAILY

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

    Hang Seng Index once fell near 27,000 points due to mainland stock market plungedon Tuesday morning, yet it then picked up the rise trend then. The index closed at27,333, increasing 252 points. HSCEI closed at 13,609, rising 225 points. Turnoverwas just $136 billion. Chinese Financial and Petroleum sectors performed wellwhereas China Mobile(0941)jumped 3%. Mainland CBM producer AAG Energy(2686)was listed on Tuesday, and it stayed below IPO price for the whole day. Itfinally closed at $2.78, which was 7.3% lower than the IPO price.

    Optimism on a possible solution to Greece’s debt issue continued to support Europeand US stock market on Tuesday. Besides, buying interest remained strong ontechnology stocks with Facebook hitting new high. The Dow and the Nasdaq closed25 points (to 18,145) and 6 points (to 5,160) higher respectively. On the other hand,a normally dovish Federal Reserve governor said that it is likely to have interest ratehike this year, US dollar index rose sharply while 10 Year US Treasury Yield rose 4basis points to 2.41%.Hong Kong market continued to rise in the past two days but itcannot confirmed that market has already finished correction. Given volatile A sharemarket movement, as well as strong US Dollar and rising US treasury yield, it willhave impact on HK stock market. Major resistance for Hang Seng Index is at 50 DaySMA(27,540).

    Technical Analysis.

    Hang Seng Index closed with gyro on Tuesday. Technically, market regained20DMA (27,186), couple with MACD bearish gap narrowed, showing thatmomentum turning stable. Hang Seng index first support would be 10DMA (26,893),while next support would be 26,553. For resistance, 50DMA (27,540) would becomethe first resistance, while next resistance would be seen at 28,000.