Hang Seng Snaps its 4-Week Profitable Streak

  • HKG33
    (${instrument.percentChange}%)

HKG33 Analysis

After its January slump, HKG33 runs a relief rally that sent it to 2024 highs a few days back. The key drivers of the latest push were strong results from Chinese tech giants and Beijing's measure to prop the ailing and crucial property market.

However, things changed after the new peak, as the Hong Kong benchmark index is weighed by risk aversion, forcing it to the first losing week in more than a month. The real estate sector remains very weak and is unlikely to return to its former glory. Trade fears after persisted after the US government's announcement of tariffs on $18 billion of imports from China and geopolitical woes were added to the mix, since the Chinese army is conducting drills around Taiwan. [1]

HKG33 is now exposed to a pivotal technical area, provided by the EMA200 and the 38.2% Fibonacci of this year's advance (19,950-19,876), Daily closes below it would negate the bullish momentum and open the door to deeper correction towards the ascending trend line form the 2024 lows. Despite the pullback, the aforementioned crucial support confluence can contain the correction. Such outcome would reaffirm the upside bias and give HKG33 the opportunity to challenge 20,376.

Even though China's recovery is bumpy, there have been encouraging signs around its economic health recently. Furthermore, tech giants posted mostly strong results this quarter, with Xiaomi being the latest. Despite dropping after its Q1 report, the company saw an increase in revenue and smartphone shipments, as the market recovers. Most importantly, its foray into EVs can drive more growth and Xiaomi expects aims to deliver more than 100K vehicles this year. [2]

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 24 May 2024 https://english.news.cn/20240523/2e8ebbb3171a4f4e96e0147f35fd1df4/c.html

2

Retrieved 24 Jun 2024 https://ir.mi.com/financial-information/quarterly-results

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