JICPT|HSI rebounded from bottom, yet to terminate the trend
Hello everyone. It's been a while since I published trade idea last time. Recently, Hong Kong market and mainland got my attention, not because I have exposure to those market, but the turning point is forming or was formed.
There is no doubt that HSI is cheap. It didn't benefit too much from the QE policies implemented by central banks around the world. It surprisingly recorded losses for two consecutive years in 2020 and 2021 whilst peers soared into the sky.
On the monthly chart, I drew an uptrend line which the index clearly penetrated. However, the zone with a range of 11355 to 13755 looked pretty solid. The possibility of closing below the zone is very very low.
On the weekly chart, I added Hong Kong foreign reserve line. It is also clear that the correlation between the index and the reserve is positive. Fed hiked the rates aggressively this year. It cost HK government a lot of reserve to maintain its currency HKD against USD in the narrow range of 7.75 to 7.85. No wonder, the index dropped dramatically this year.
However, things started to changed with news of no quarantine period required for cross-border travel to HK. In addition, the recent relaxed Covid-19 restrictions in mainland China also gave the market a boost.
On the daily chart, we can see that the downtrend line is yet to be broken at the level around 20000. I'm expecting a battle between seller and buyers once it reaches the key level.
In my view, the potential room to the downside is limited. HSI is really attractive for me to allocation some money to capture the upside move.
What do you think? Give me a like if you're with me.
There is no doubt that HSI is cheap. It didn't benefit too much from the QE policies implemented by central banks around the world. It surprisingly recorded losses for two consecutive years in 2020 and 2021 whilst peers soared into the sky.
On the monthly chart, I drew an uptrend line which the index clearly penetrated. However, the zone with a range of 11355 to 13755 looked pretty solid. The possibility of closing below the zone is very very low.
On the weekly chart, I added Hong Kong foreign reserve line. It is also clear that the correlation between the index and the reserve is positive. Fed hiked the rates aggressively this year. It cost HK government a lot of reserve to maintain its currency HKD against USD in the narrow range of 7.75 to 7.85. No wonder, the index dropped dramatically this year.
However, things started to changed with news of no quarantine period required for cross-border travel to HK. In addition, the recent relaxed Covid-19 restrictions in mainland China also gave the market a boost.
On the daily chart, we can see that the downtrend line is yet to be broken at the level around 20000. I'm expecting a battle between seller and buyers once it reaches the key level.
In my view, the potential room to the downside is limited. HSI is really attractive for me to allocation some money to capture the upside move.
What do you think? Give me a like if you're with me.
plan your trade and trade your plan