Investment Daily

Hong Kong stock market was not adversely affected on Monday, after a terroristattack in France and a failed Turkish coup during the weekend. Hong Kongequities traded within narrow range on Monday morning. HSI Index widened itsgains after lunch break. The Index closed at 21,803 points, increasing 144 points.

    HSCEI closed at 9,090 points, rising 41 points. Turnover for the whole day was$55.6 billion. Automobile sector showed strong performance, related stocks rose2% to 6%. On the other hand, the leader of worldwide PC manufacturer rose over7%, which is the best blue chip performer.

    US stock market traded within narrow range on Monday. Thanks to better thanexpected quarter results from Bank of America, banking stocks performed well onMonday. The Dow and S&P 500 both close at historical new high while theNasdaq also rose to its new closing high year to date. The Dow and the Nasdaqrose 17 points (to 18,533) and 26 points (to 5,056) respectively. On the other hand,oversupply concerns re-emerged, crude price fell more than 1% to 45.2 US dollarper barrel.

    HK Dollar turned strong, reflecting Hang Seng Index has a relatively low price toearnings ratio but higher dividend yield, as compared with other global stockmarket, attracted funds flow into HK market. Next resistance is at 22,000.

    Technical Analysis

    While Hang Seng Index keeps surging, the turnover apparently decreases, and thenumber of declining stocks is more than rising stocks. This means the uprisingforce of the index is weakening. It can’t be ruled out that the stock market maymake some downward adjustment before it surpasses 22,000 points. The firstsupport of the index is 10-DMA 21,097 points, and the next support is 50-DMA20,552 points. The first resistance will be 22,000 points, and the next resistancewill be 22,500 points.