Looking at the chart and with Dow Jones one day closed up the next day closed down, we think Dow Jones will trade between 15800-16500 in short term. Unless market break above 16600, we'll see a new uptrend formed.
February is the shortest trading month for Asia market. The trading range for Hang Seng Index futures for this month is traded between 18217-19715 (1498). There is another two days till spot month futures contract expiry, we think market will hover around Daily MA10 at 19027.
Traditionally, market will rally from March till April or end of May due to corporate earnings announcement. Will this trend continue this year? According to Financial Secretary John Tsang, Hong Kong is facing slower growth and is in a challenging economic situation.
We see HSI will range bound between 18530-19500 in near term. If there is any good news in the market, short covering and fresh buyers may push market above 19600, the next resistance is seen at 20000, then 21000. Conversely, if short sellers and panic cut loss send market towards 18200, further support is seen at 16000.
As for KLCI, market is expected to range between 1625-1675 until new catalyst form a new uptrend or downtrend. Key support and key resistance are 1600 and 1700, respectively.
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