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S&P 500, Nasdaq Hit All-Time Closing Highs, HK Market Sentiment Remains Fragile

US Stocks 

Fundamental Analysis: 

US stocks gained ground again on Wednesday, 25 August 2021, with chipmakers and financial stocks helping to push the S&P 500 and the Nasdaq to record closing highs as investors look to the upcoming Jackson Hole Symposium for assurances that the Federal Reserve’s timeline for policy tightening remains intact. 

The Dow Jones Industrial Average rose by 0.11%, the S&P 500 gained 0.22%, and the Nasdaq Composite increased by 0.15%. With few negative catalysts to sour the risk, all three major US indices ended the session modestly higher. 

Days after the Food and Drug Administration (FDA) gave full approval to the Pfizer-BioNTech COVID-19 vaccine, companies and institutions are moving toward either mandated inoculation, or penalization for those who forego the shot. 

Following a long run, stock indices have cooled off as the next engine of growth is unclear. Fiscal and monetary stimulus may have lost the motivation to push the market higher.

Technical Analysis:

(Dow30,1-hour chart) 

Execution Insight:

The Dow has completed the five waves up yesterday, and the follow-up has entered the stage of adjustment. Meanwhile, the Dow’s performance is relatively weak compared with the Nasdaq and the S&P 500 – the Nasdaq and the S&P have hit new highs one after another.  

Therefore, today’s attention is paid to the 35346 line. If the Dow is running above the 35346 line, it belongs to the strong support area. Then, pay attention to whether the Dow will break through the 35601 line. If it falls below the 35346 range, it is likely to indicate that the Dow will carry out a deep and complex retracement of the five-wave structure formed on the left. 

Subsequently, pay attention to the strength of the 35226 and 35110 positions. Once the Dow breaks the 35110 line, it will open the space for further deep retracement of the Dow. At that time, focus on the support of the 34990 and 34724 lines.

Hong Kong Stocks 

Fundamental Analysis: 

Judging from the recent performance of Hong Kong stocks, its risk appetite is low and market sentiment is still fragile. New energy, vaccines, communications, and chips may be moderately resilient, while local stocks, telecom operators, and the upstream of the cycle are under attack. However, Hang Seng Technology is expected to gradually stabilize.

External factors, such as the pandemic crisis resurfacing in the foreign markets; the return of funds from the rebound at the bottom of the dollar index to the United States; and more importantly, the continuous regulatory pressure faced by domestic internet-related companies that have become the main body of the Hong Kong stock market, have also led to a relatively fragile state of the market.

Technical Analysis: 

(HK50,1-hour chart)

Execution Insight: 

On HK50, we continue to focus on the 25816 line. If HK50 manages to rise to the top range of 25816, it will open up further upward revision. At that time, pay attention to the suppression strength of the two positions of 26535 and 26951. If HK50 runs below the 25816 line, divert your attention to the support of the 25160 position. 

FTSE China A50 Index 

Technical Analysis: 

(A50,1-hour chart)

Execution Insight: 

On A50, we shall focus on the middle Bollinger Band today. As long as A50 runs above the middle Bollinger Band, the buying order is strong. Then, pay attention to the suppression strength of the 15666 and 16163 lines above. If A50 falls below the middle Bollinger Band, the buying order turns to weak. At that time, shift your focus to the support of the 14669 line below. 

While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision. 

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