Posted by Book Eater
Sept 3, 2008
Hang Seng Market Overview:
Certainly not outside the realm of possible
I mentioned last Sept 2 that the index could retest its previous low of 20,350 and this certainly cannot be ignored. Wall Street’s sell-off from 240 points up in the open to close negative 27 showed just how bear market rallies typically behave. Hong Kong’s index followed suit. It opened yesterday at 20,964.75, near where it closed a day ago, but went down with heavy selling to fall at an intraday low of 20,526.73 or 500 points down and closed slightly higher at 20,585.06 closing 457.40 points down or 2.17%. While these occurrences can be frustrating, it should be noted that market bottoms will usually retest lows, or it may also not. 20,350 is the next support. If it falls lower, then all hell is loose. MACD points a divergence so bulls still have a fighting chance.
Recommendation: Traders can go long on selective stocks. Many chart patterns are divergent. One of which that I will highlight today is Zhejiang Express or 576 HK.
Intraday Hangseng Chart
Daily Hang Seng Chart:
Stock Picks:
Zhejiang Express (576)
Support: 5.00
Preferred Entry: 5.12
Resistance: 6
Risk Reward Ratio : 88 cents gain for 12 cents loss
