Hang Seng Index turned its tail....>

HONG KONG STOCKS: Hang Seng Index turned its tail and retreated from multi-month

highs today. Stochastics sent a "sell" after a -ve divergence developed through

Jan, raising a red flag re: underlying bullish momentum. HSI is now testing the

23.6% retracement of the Aug 15 - Jan 20 rally, with the Jan 8 low in sight.

Bulls look for a rebound, keeping an eye on the 50-DMA which nears the 200-DMA,

but with both DMAs already running flat these hopes may soon prove futile.

- HSI dropped alongside other regional equity benchmarks today, as mkts absorb

the growing concern re: Chinese coronavirus at the time when LNY-related travel

rush increases the risk of contagion. Although actual potential impact on HK is

questionable at this point (a source flagged that mainland travellers are

"already avoiding HK in droves"), headline-driven panic may take economic toll.

- A downgrade to the city's ratings outlook by Moody's further sapped sentiment.

Moody's criticised the lack of plans on how to constructively address the

ongoing political unrest. The PRC's top HK off'l called upon local gov't to

enact strict security laws, signalling lack of will to engage w/protesters.

- For the chart see: https://emedia.marketnews.com/HSI21012020.png