Hong Kong Exchange Eyes on Further Upside After Taking a Short Break

Hong Kong Exchange (388.HK) Eyes on Further Upside After Taking a Short Break

Hong Kong Exchange (388.HK) is outperforming Hong Kong's Hang Seng Index. The company rose around 45% from March low, while the Hang Index was up only up about 13%. Hong Kong Exchange is benefited by the returning of Chinese listed companies from the U.S. market

In fact, Chinese companies are interested to kick off its secondary listing planning in Hong Kong Exchange as the U.S. Senate passed legislation that could restrict Chinese companies from listing on American exchanges or raise money from U.S. investors, unless they abide by Washington's regulatory and audit standards.

Recently, Rumors said Nasdaq-listed Yum China, operating famous catering brands in China, such as KFC and Pizza Hut, will launch the secondary list in Hong Kong Exchange to raise $2billion, reported Bloomberg citing Insider.

Besides, CICC lifted HKEX's target prices by 8% to HK$343 with the rate at Outperform. In addition, CICC also said the broker attributed this to quicker-than-expected listing of Chinese ADRs in Hong Kong and upcoming launches of new products.

From a technical point of view, the stock broke above the recent consolidation zone on the daily chart. It indicates the resumption of the recent up trend. Besides, the lower Boundary of consolidation zone is above the 2019 high at HK$286, indicating that the stock has successfully broken this strong resistance level.

Besides, the rising 20-day moving average is pushing the prices higher. It would be good to use the 20-day moving average as trailing support level.

Bullish Readers could set the key support level at HK$286 (around the 20-day moving average and overlapping support level), while resistance levels would be located at HK$311.40 (record high) and HK$331 (100% measured move).

Source: GAIN Capital, TradingView

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.