Technical Analysis / Chartered Market Technician, The Markets Academy

David Coloretti, CMT

Technical Analysis / Chartered Market Technician

The Markets Academy

TMA implements 2 strategies. 1) Tactical ... Trend Sustainability Score (TSS) allows TMA to identify exhaustion / reversal points in interim trends by utilising our proprietary analysis of ST momentum indicators. 2) Medium Term ... our 3 Pillars approach to technical analysis allows TMA to determine high probability medium term outcomes in markets.

Technical Analysis

Hang Seng China Enterprises Index / Technical Analysis

<ul>
<li>At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.</li>
<li>The HSCEI has produced 2 material failures below 5000 in the last 17 years, in October 2008 and October 2022. Aggressive bullish multi-month reversals followed in both cases. </li>
<li>The 2008 upswing paused when a bearish monthly reversal pattern was delivered in January 2009, but only for 2 months. The bearish monthly reversal pattern in February 2023 appears similar. </li>
</ul>


At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
The HSCEI has produced 2 material failures below 5000 in the last 17 years, in October 2008 and October 2022. Aggressive bullish multi-month reversals followed in both cases. 
The 2008 upswing paused when a bearish monthly reversal pattern was delivered in January 2009, but only for 2 months. The bearish monthly reversal pattern in February 2023 appears similar. 


Hang Seng CEI (HSCEI) - Is Q1 2023 a Correction that Mirrors the Correction of Q1 2009?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/weibo-corp" target="_blank" data-smartkarma-citation="entities:35280:1" rel="noopener">Weibo Corp (9898 HK)</a> replaces <a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan Cloud Group (909 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a> at the close on 10 March.</li>
<li>Using prices from the close on 24 February, estimated one-way turnover is 8.92% and will result in a one-way trade of HK$7,078m at the close on 10 March.</li>
<li>There will be big buying on <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a> and <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> due to a change in the index handling methodology for Dual Primary listings.</li>
</ul>



Weibo Corp (9898 HK) replaces Ming Yuan Cloud Group (909 HK) in the Hang Seng Tech Index (HSTECH INDEX) at the close on 10 March.
Using prices from the close on 24 February, estimated one-way turnover is 8.92% and will result in a one-way trade of HK$7,078m at the close on 10 March.
There will be big buying on Li Auto (2015 HK) and XPeng (9868 HK) due to a change in the index handling methodology for Dual Primary listings.


HSTECH Index Rebalance: Weibo Replaces Ming Yuan Cloud; Big Inflows on Li Auto & XPeng

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> replaces <a href="https://www.smartkarma.com/entities/china-feihe-ltd" target="_blank" data-smartkarma-citation="entities:24413:1" rel="noopener">China Feihe (6186 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> at the close on 10 March.</li>
<li>Using prices from the close on 24 February, estimated one-way turnover is 3.28% and will result in a one-way trade of HK$2,162m at the close on 10 March.</li>
<li>Short interest on <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a>, <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/china-feihe-ltd" target="_blank" data-smartkarma-citation="entities:24413:1" rel="noopener">China Feihe (6186 HK)</a> is quite high in terms of days of ADV to cover and in terms of float.</li>
</ul>


As expected, XPeng (9868 HK) replaces China Feihe (6186 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close on 10 March.
Using prices from the close on 24 February, estimated one-way turnover is 3.28% and will result in a one-way trade of HK$2,162m at the close on 10 March.
Short interest on XPeng (9868 HK), Li Auto (2015 HK), China Feihe (6186 HK) is quite high in terms of days of ADV to cover and in terms of float.


HSCEI Index Rebalance: Xpeng (9868) Replaces China Feihe (6186); Li Auto (2015) Biggest Gainer

Xinjiang Goldwind Science & Technology / Technical Analysis

<ul>
<li>At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.</li>
<li>The 2021/2023 downtrend is accompanied by comprehensive LT momentum confirmation. The 2012/2023 uptrend support at 6.92/6.94 remains at risk of being retested in the coming 1-2 months,</li>
<li>A monthly close below 6.92/6.94 would confirm a far more significant multi-month downtrend. For now we target 6.92/6.94 (-10%). The response to 6.92/6.94 is critical to the MT outlook.</li>
</ul>


At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
The 2021/2023 downtrend is accompanied by comprehensive LT momentum confirmation. The 2012/2023 uptrend support at 6.92/6.94 remains at risk of being retested in the coming 1-2 months,
A monthly close below 6.92/6.94 would confirm a far more significant multi-month downtrend. For now we target 6.92/6.94 (-10%). The response to 6.92/6.94 is critical to the MT outlook.


Xinjiang Goldwind Science & Technology (2208 HK) - 2021/2023 Downtrend - Target LT Trend - 6.92/6.94

Founder of Antler Capital

Stanley Tsai, CFA

Thematic (Sector/Industry)

<ul>
<li>We welcome the regulators' formalization of financial asset classifications. This will gradually remove regulatory arbitrage and pave the way for further bank reintermediation.</li>
<li>The new rules will likely have limited impacts on bond holdings that have active secondary markets, but illiquid debt investment plans will come under more intense regulatory and auditor scrutiny.</li>
<li>We see an impact of 10-15bp on the listed banks' reported NPL ratios. That said, a handful of banks may be at risk of capital shortages if the environment worsens. </li>
</ul>


We welcome the regulators' formalization of financial asset classifications. This will gradually remove regulatory arbitrage and pave the way for further bank reintermediation.
The new rules will likely have limited impacts on bond holdings that have active secondary markets, but illiquid debt investment plans will come under more intense regulatory and auditor scrutiny.
We see an impact of 10-15bp on the listed banks' reported NPL ratios. That said, a handful of banks may be at risk of capital shortages if the environment worsens. 


Chinese Banks: New Asset Classification Rules | You Can Run but You Can't Hide

China

The Hang Seng China Enterprises Index is a free-float capitalization-weighted index comprised of H-Shares listed on the Hong Kong Stock Exchange and included in the Hang Seng Mainland Composite Index. The base value of this index is 2000 as of Jan 3, 2000. This index replaced the old HSCE index on Oct. 3, 2001.

Hang Seng China Enterprises Index (HSCEI INDEX)

Hang Seng China Enterprises Index (HSCEI INDEX)

Hang Seng CEI (HSCEI) - Is Q1 2023 a Correction that Mirrors the Correction of Q1 2009?

30+ years as a technical analyst and a razor sharp focus on momentum confirmation delivered TMA a 75% unleveraged return on our 7 Smartkarma...

David Coloretti, CMT

HSTECH Index Rebalance: Weibo Replaces Ming Yuan Cloud; Big Inflows on Li Auto & XPeng

Weibo replaces Ming Yuan Cloud in March. There will be big inflows on Li Auto & XPeng due to index handling changes for dual primary listings....

Brian Freitas

HSCEI Index Rebalance: Xpeng (9868) Replaces China Feihe (6186); Li Auto (2015) Biggest Gainer

Xpeng replaces China Feihe in the HSCEI at the close on 10 March. Li Auto is the biggest gainer following a change in index handling for dual...

Brian Freitas

Xinjiang Goldwind Science & Technology (2208 HK) - 2021/2023 Downtrend - Target LT Trend - 6.92/6.94

30+ years as a technical analyst and a razor sharp focus on momentum confirmation delivered TMA a 75% unleveraged return on our 7 Smartkarma...

David Coloretti, CMT

Chinese Banks: New Asset Classification Rules | You Can Run but You Can't Hide

New asset classification rules have officially been announced. We see this as a long-term positive for the sector as regulators continue to bring...

Stanley Tsai, CFA