Hong Kong Stocks Report

Prof. Kai Keung Mark is a retired professor, Dept. of Biology, The Chinese University of Hong Kong and Dept. Head and Principal Lecturer, Dept. of Science, Hong Kong Institute of Education. He has three biotechnology patents. He uses his understanding of high technology to forecast market movements . He has published 13 articles in Financial Trend, and leading Hong Kong stock analysis journal plus many other Mark's letters since 1987. His prediction reliability rate reached 80%. He accurately predicted the October crash (10/18/87), the bottom level of 1990(3/5/90), the peak level of 1994 (5/11/92), the peak level of 1997 (2/12/96), the peak level of 2,000 (8/22/99), the peak in March 2000 (2/20/2000), and the bottom in September, 2001.

Bull prefers Hong Kong than US
December 23, 2000

The most significant achievement of my last article (Mark 10. Nov.23) is the system that allows me to pinpoint the lowest point of HSI (13,950) for HSI stop right on the contact point with the support line drawn from the last two low points as predicted. The second success is the prediction that it will penetrate the fan line III upside, followed by a powerful upsurge (See chart 1). However, the prediction is not 100% correct in that the rise penetrated the fan line III in the first attempt instead of the expected second attempt. May be Alan Greenspan's hint on the up coming reduction of interest rate jack up stock price all over the world including Hong Kong. Such powerful news might shift up the melody by a few notes.

Now the HSI in Hong Kong has completed its down side correction, I predict it should turn around to head upwards. The basis for this prediction is based on technical analysis rules. The first one is called "three fan" rule. When the downward correction in three waves following the pattern of three fan lines. and then penetrated the third fan line (Fan Line III) upside, the downward movement would turn around and move upward for a period longer than the downward move. The second rule is wedge formation. The Fan line III and the support line from the three low points are converging downward, and such chart formation is called wedge formation. When the wedge is broken upside, the index will continue to move upward as a general direction.

Now, as the up shoot after the upward penetration of Fan Line III is followed by a correction (See chart 1), this correction will not penetrate the Fan Line III downside for this line (Fan Line III) is now turn into a support line. Therefore one can still get in at very low prices. Early detection of the turning point is the magic element in successful stock trading. Although the bull has return to Hong Kong, do not expect a dramatic rise in the immediate future under a bearish shadow of the US market (see below).

The US market will not be bullish like Hong Kong, as US is in a different phase of its business cycle. Even with good news of coming interest rate cut, it only promotes both the DJIA and NASDAQ to rise and penetrate the existing down trend, but stops exactly on the next fan line type return lines (See chart 2 and 3). After reaching these return lines, it initiates another cycle of down moves which are likely to make new lows in the coming weeks.

Chart 2:

Chart 3

The information above is supplied by the author specially for InTechTra's Hong Kong Stocks Report. The opinions in this special column is solely that of the author and may or may not represent the views of Hong Kong Stocks Report. InTechTra is indemnified for any damage or loss that might be associated with the use of the information.