Recap of the Day

The Hang Seng was impressive holding above 14,000 to close 39.97 points up at 14,384.34 this Tuesday, on the eve of the Presidential Elections in the US. It opened at 14,337.62 points, then was sold 500 points down to as low as 13853.16 points. It however staged a reversal and maintained its gains until late afternoon reaching an intraday high of 14539.59 points at the close.

Hang Seng intra-day chart

Hang Seng daily chart

The daily chart of the HK market is still consolidating above the 14,000 area with some traders seeing a possible consolidation via profit taking and some cautious selling. The MACD is still at oversold levels. The Hang Seng can range between a support of 13,300 to a resistance of 15,940. It is better to go long and wait for the market to consolidate near zero line before reinstating shorts.

Recommendation: Active and disciplined traders can take a position in this market. I recommend Lifestyle Holdings (1212 HK). Hold previous positions like 2600 HK which was recommended last Friday. It is still up and has not violated the support levels. Target price of 3.60 is still imminent. Short term traders can also go in and out of the stock as it is in a 10% volatility range).