The past few days have seen a rebound of the Hang Seng index, after the recent three per cent drop. The rebound comes amidst China’s surprise decision to refuse to cut interest rates. Many financial analysts had expectations for more stimulus from China, which would have resulted in a lowering of interest rates. The decision resulted in the Mainland Chinese shares slipping during the trading session.
However, the announcement looks to have had no impact on the Hong Kong markets, as Hang Seng Index remained stable. Today, the Hong Kong stock markets remain closed for Good Friday. However, investors remain hopeful of the index continuing to rise after the markets reopen after the holidays. There is a high likelihood that the index will continue its rebound.
Hong Kong closed on Thursday and will remain closed today because it is a public holiday. however, looking at the daily chart below, we can see the prices have recently returned inside the descending channel. We can also see the prices bouncing from the lower trend line of the channel. The last three trading sessions have also been aggressively bullish. Therefore there is a high chance that the index’s current trend will continue. This will mean a possible rise to the 22529 price level, a recent price high.
Since the markets will also remain closed for the Easter holidays celebration, I expect the prices to have a huge market gap when Hong Kong Stock Exchange reopens. This will mean that traders should expect the markets to open further away from the current prices. However, I expect a good chance that the markets will open higher than Thursday’s closing price.
In the event that the markets open lower when the markets open on Tuesday, then my trade analysis will be invalidated. It will also mean a lot has happened during the weekend to move the markets downwards.
This post was last modified on Apr 15, 2022, 22:14 BST 22:14