INVESTMENT DAILY
Mainland bank and resources plays were weak, dragged HK stock market to fall onFriday. However, A share remained strong which helped HK stock narrowed someof its loss. Hang Seng Index dropped 184 points to 22,867 while H share index lost62 points to 10,556. Market turnover is HK$71.5bn. Standard & Poor forecastmainland bank bad debt ratio rose to 3% and earnings to decline starting from 2016,CCB (0939.HK) dropped 1.6%. Besides, standard chartered credit raisingdowngrade, its share price dropped by 4.6%. On the other hand, A share strong,mainland brokerage stocks continued its recent rally.
October non-farm payroll added 271,000 jobs, unemployment rate fell to 5.0% andaverage hourly salary rose 2.5% yoy, all these figures are much stronger thanexpected. It further increase the chance of a rate hike in December. However, USstock market maintained its recent strength, the Dow and the Nasdaq rose 47 points(to 17,910) and 19 points (to 5,147) respectively. On the other hand, funds flowaway from bond market, 10 Year US Treasury Yield rose 8 basis point to 2.34%.
A share restart its IPO, China October import and export below expectation, as wellas increasing chance of US rate hike, HK stock market is likely to open lower onMonday. Besides, there are lots of mainland economic data to be released this week,which will be market focus.
Technical Analysis
Hang Seng Index fell back on recent days and stayed close to 10DMA 22,859 pointslast Friday. The index 14-day RSI is located above 50. Currently the Bollinger Bandis narrowing, and the MACD bearish gap is pretty small, indicating a possibility of atrend market very soon. In the short run, since the index fell back for several timesafter it climbed to 23,200 points, hence this becomes the first resistance. The nextresistance will be 23,508 points, which is 0.382x rebound target between 28,589points(this year’s peak)and 20,368 points(this year’s trough). In addition, the firstsupport would be 22,400 points, and the next support would be 50DMA 22,036points.
