Investment Daily

The Hang Seng Index is expected to trade at 22,500 to 22,900today

    US stock rebound which provide support to HK stock market on early Friday, the HangSeng Index once rose near 70 points. However, as A share continued its recent retreattrend, HK stock market also turned down afterward. The Hang Seng Index fell 137points to 22,698 with H share index lost 114 points to 10,178. Market turnover wasHK$62.5bn. Great Wall(2333.HK) 3Q13 net profit rose40% yoy but was still belowexpectation, its share price fell 7.0% to HK$45.05. On the contrast, China StarEntertainment(0326.HK) intends to show its Macau asset, its share price rose 41.8%.

    Thanks to better than expected earnings report from Microsoft and Amazon, US stockmarket continued its rally last Friday. The Dow and the Nasdaq finished the day 61points (to 15,570) and 14 points (to 3,943) respectively. Looking ahead, investor focusthis week will eye on the FOMC meeting on Wednesday. Besides, there are still a lot ofeconomic data (especially private employment data on Wednesday) and corporateearnings reports to be released, which will also be focus.The Hang Seng Index tested itshigh earlier last week but failed to overcome the resistance level. SHIBOR increasedlater in the week, triggered heavy profit taking pressure on the Hong Kong stock market.

    However, since US dollar remained weak, while the third Plenary session has not startedfor China, we expect to see strong support at 100 Day SMA(22,050).

    Technical Analysis

    Hang Seng Index closed with gyro on Friday. Technically, market dropped below50DMA (22,762), and MACD bearish gap expanded, showing that momentum turningweak. The first resistance would be 50DMA (22,762) while next resistance would see at20DMA (23,109). For support, the first support retreated to 250DMA (22,334), whilenext support would see at 100DMA (22,050).