Sunday, August 19, 2007

A50 Tracker and HS China Enterprises Index (HKCEI) Technical Analysis

Just want to share the following two set of charts, seems like no charting tool can concurrently display two MACD, I've manually paste the A50 (using as proxy) and HSCEI MACD side by side to better analyze the two recent opposite trends.

In hindsight, should have been alerted in early August when HKCEI MACD was developing a stronger and stronger negative divergence.

Currently A50 is also developing a negative MACD divergence, will it develop further and it's a sign of A-share market correction?

I’ve no crystal ball but I am a bit cautious about the recent policy risk developing in China based on what I observed and heard:

  • No action has been taken yet on the 5.6% July CPI figure which was announced last Monday
  • Rumours of new housing loan policy with down payment increased to 50% and no new loan for 2nd home

For anyone interested in treasure hunt HK stocks, especially those new IPO listed since 2006, here is an analysis of all Hong Kong IPO performance for 2006 and 2007.