DJ MARKET TALK: HSI +2.8%; Extremely Oversold Recently - Trader

27 Sep 2011 13:52

0551 GMT [Dow Jones] Despite today's HSI rebound which snaps a 4-session 8.5% losing streak, the index remains below its 5-day moving average at 18,164, which marks the 17th consecutive session that the benchmark index is trading below its 5-day MA, observes a local trader. He says this is the probably the first time since the Asian financial turmoil back in 1997/98 that the HSI had stayed below the 5-day MA for such a long time, which shows "how oversold Hong Kong stocks are." He believes this round of rebound may take the index to the 19,000 level, and the duration could last for 2 weeks. The HSI is up 2.8% at 17,987.36 on a broad-based rebound; blue chips rallying more than 5% include China Merchants Holdings (0144.HK), Esprit (0330.HK), Cnooc (0883.HK), Ping An (2318.HK) and Chalco (2600.HK), although the fly in the ointment is that volume remains sluggish at HK$34.25 billion. (robert.li@dowjones.com)