I don’t have much insight to today’s market. Most likley there is some pull back after yesterday’s big jump. The China economic data are not creating much impact on the indices today (The Shanghai indicies didn’t drop at all). There may be some movement in the afternoon because of the land sale in Tung Chung. Other than that, today will be a quiet day.
Bought some bull certs again and aimed to get out intra-day with a few points of gain.
Good news from Europe this morning. The ECB and the financial ministers finally have come up with something more concrete. Their much-swifter action over this weekend to give something concrete to the public before Asia opens is definitely something that tells people that they are finally getting their acts together to defend the Euro. A big contrast to the past few months where leaders were not too enthusiastic in helping Greece and the PIIGS out given the leaders’ political implications in their home countries. Strong confidence boost to the stock market!
As I said in the comments to my last post, I believe the market will go up today (at least this morning). No analyst / strategist should come up with any negative report at least until morning in Europe so it is guaranteed that there will be a few hours of good time.
Strategy to profit:
Just bought a few bull certs and hopefully it will up a few points and then I will exit the trade intraday.
I would remain long overall as it seems like the bears should cut its shorts given the good news in Europe. Hopefully there will be some short covering and world indices will continue to go up throughout the day.
Bought HSI Bull Cert in the last hour of trading. Bought it at around 28000. Too bad it dropped another 40 pts or so and closed at 20763.
My strategy is that since it has broken its 100 day MA already (21200) and it’s approaching the 250 day MA line (20489). The downside is quite limited. If it drops again in the next few days, I probably will buy more HSI Bull Cert when it is close to 20500.
If it actually rises above 21000 tomorrow, of course I will sell the Bull Cert!
US indices – Dow, Nasdaq and S&P all up more than 1.3% overnight
On the other hand, China market is back from holiday and probably will be down for the day due to the increase in bank reserve ratio over the weekend.
As China market will probably place a stronger influence on the HK stock market than the US one, I would think the Hong Kong indices will not go up that much today.
Action for today:
Sell the bull cert that was bought at market closing yesterday
Depending on stock movement during the day, I may buy HSI bull cert if the market seems to be well supported at around 21000. But very likely, I would not do much today.
Plan for the day:
Down day today due to two reasons:
1) US stock markets down last Friday
2) Chinese government increased bank reserve ratio for the third time this year over the weekend
Since mainland market is closed due to labor day holiday, there should not be much news during the day. My forecast is that HSI and HSCEI will both open low, rise a little bit in the 1st hour and then will continue its downtrend throughout the day
Intra-day: Buy HSI or HSCEI bear cert in the morning and sell after a few upticks.
Longer term strategy:
Since HSI and HSCEI are both very close to their 250 day moving averages, this is definitely a buying opportunity. Therefore, I plan to buy some bull certs on HSI, HSCEI right before market closes today. Hopefully, the market will be at its lowest point in the last hour of trading.
With National People’s Congress in Beijing this week, people are expecting announcement on the country’s directions from Wen Jiabao this Friday morning (March 5 2010). People are mainly expecting the government will:
i) Continue to promote consumption inside the country
ii) Promote agriculture and increase the living standard of its citizens, particularly the inland western areas
iii) Slow down the increase in real estate price, slowly deflating the asset bubble
Sectors of the week
This should benefit the following sectors:
Consumer (discretionary and staples), Agriculture
and affect the following sectors negatively:
Banks, Real Estate
Stock picks of the week:
Digital China (861 HK) (IT stock, P/E relatively low – 15 times)
Chaoda (623 HK) (Agriculture stock, low P/E – 7 times)
China Green (904 HK) (Agriculture stock, low P/E – 15 times)
With the HSI rising more than 52% in 2009, let’s hope there will be a repeat in 2010!
Here is my strategy for HK Stocks this year:
Happy Trading for 2010 everyone!
No one should under-estimate the wealth of anyone in HK. Yesterday the headlines of most newspapers are about an unknown 76-year-old-woman (which looks more like a woman in her late 50s or early 60s) suing UBS for misleading her to buy a series of accumulator contracts which led to a loss of over HKD 200 million. The old woman claims she only has a primary three education and does not read or understand English.
I am not surprised that there are lawsuits like this suing investment banks for advising uneducated or illiterate people to buy accumulator products that made them some money at the beginning and lost a big fortune at the end. But what is the most intriguing is how she amassed such a big fortune… HK is really a place where you can make a lot of money…
This is an excerpt from David Webb’s newsletter today:
Thought for the day: after locking up hundreds of tourists in a hotel to boost the tourism industry/in the vain hope of isolating HK from swine flu, we are now the only territory in the world to shut down all schools, ironically at the same time as announcing plans to make HK an education hub by dolling out land to “private universities”. Is the government giving up on our public universities? How can you build a university with only 200,000 sq ft of floor area anyway – equivalent to about 10 floors of the Cheung Kong Centre? Meanwhile HK Disneyland responds to the kindergarten/primary shutdown by launching a special unlimited entry pass for children before the end of June. At least, we thought, there is some entrepreneurialism left in HK, albeit imported. But not so fast – lest we forget, this is the world’s only Government-owned Disneyland. The offer no longer appears on the Disney web site.
It just seems to me that the Hong Kong government has been telling people that they are pushing some industries to grow, but at the end most end up dying… Since the Tung Chee Wa’s era, we have seen: dot com, Chinese medicine, Islamic finance, wine trading, etc. But none of them are really prospering at the moment. Hong Kong government really need to think hard why this is happening. Are the policies too short-sighted? Has the government spent enough resources in promoting these industries? Maybe the environment in HK is really stifling the entrepreneurial spirits that were founded in HK thirty years ago?
After asserting that the blackout rule would not change because of the sudden protest by a group of listed company directors three days before the rule was supposed to be implemented, the Hong Kong Stock Exchange has finally succumbed to the pressure of the ultra-wealthy company directors and politicians, and has backed down to make the new blackout plan more palatable to the wealthy company directors.
Under the new rule that will come effect on 1 April 2009, the black out period for insider dealing will be 60 days for annual report, and 30 days for quarterly or other interim reports.
This is just another blatant example of the government catering for the rich people. What’s going on with the SFC and the HKEx staying so firmly on their position and then bowing down to political pressure a few months later?
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