Score 8.4 (out of 10): Hang Seng (Hong Kong) sets up for +7.2% rally in 3 months

88

What’s Going On Here?

China appears to soften its stance towards COVID restrictions, Hong Kong stocks could be the biggest beneficiary. Tightening US monetary policy had has an adverse impact on Hong Kong as the city’s property market has suffered. But now with (US) inflation peaking and bonds yield declining, Hong Kong could benefit tremendously.

Why Now?

Hang Seng (Hong Kong) has triggered a new technical analysis signal. During similar occasions, Hang Seng (Hong Kong) shares had a median return of + 7.2%,  over the following 3 months – based on 3 historical occasions with 3 of those showing positive returns (100%). This buy signal for Hang Seng (Hong Kong) received a high score of 8.4 (out of 10). This insight was generated on 2022-December-9 with last price of 19,900.

What’s This Asset About?

Hang Seng (Hong Kong) is in the Equity market index business. Based on the last 2 years’ risk/return profile, this asset is seen as Very Risky. Ticker symbol: HSI (or EWH).

What’s My Risk / Reward and Time Horizon?

We found 3 months to be the optimal trade horizon, after testing a number of possible alternatives (accuracy of previous returns). Otherwise consider closing out this trade once the target level of 21,326 (+7.2%) has been reached. Based on Hang Seng (Hong Kong)’s recent up and down swings, LongShortBets suggests considering to set a stop loss level for this insight at 19,027 (last price at 19,900), which is equivalent to a -4.4% decline.

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ under (2), etc.

Previous episodes:

18.2% (September-2020), +7.2% (December-2018), +1.7% (January-2016)

Historical Chart:

Summary:

NameHang Seng
ViewUp
Star (1 to 10)8.4
Target+7.2%
Time3 months
Hit Rate100%

Leave a Reply