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Hang Seng: Hanging On By A Thread + Richemont Breaking Lower – UnumCapital
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Hang Seng: Hanging On By A Thread + Richemont Breaking Lower

Hang Seng: Hanging On By A Thread + Richemont Breaking Lower

Political tensions in between the US and China as a result of the introduction of new laws in relation to Hong Kong may see a new wave of riots spring up in the region, and possibly reignite the volatility seen during 2019 when the city experienced it’s worst period since the 1990s.

A review of the monthly chart of the Hang Seng sees the index losing long term momentum, with the price threatening a downside break of the trend line going back to February 2009. We also note a double top technical formation while the Relative Strength Index (RSI) currently prints 39, suggesting a long term weakening trend.

https://tvc-invdn-com.akamaized.net/data/tvc_afc101eab4eeb18139b39ee42bb70676.png

With tensions in Hong Kong rising once again, this may be a further catalyst for weakness in Richemont, which was sharply lower on Friday (a combination of ZAR strength, risk-off and HK).

At current levels, the price remains at risk of a break of the channel which may prompt a long term move to the sub-70 range. Our recent note (5 April 2020) outlines the potential for downside risk. ( https://online.unum.co.za/research-2/research-note-compagnie-financiere-richemont-cfr )

https://www.tradingview.com/x/8M9dPpB9/

https://www.tradingview.com/x/wqgPuc2e/

Lester Davids

Trading Desk Analyst

Unum Capital (Pty) Ltd
An Authorised Financial Services Provider (FSP 564)


T: +27 (0)21 201 7270             W:  www.unum.co.za             E: lester@unum.co.za


Lester Davids

Lester joined Unum Capital in July 2016 and is a Trading Desk Analyst focusing on local (JSE) and global multi-asset class technical strategy and research which includes idea generation.

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