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.

Bulls Coming Back

(July 10, 2000)

The Hong Kong stock market has given strong signals that the bull market has returned, and I anticipated that Hang Seng Index can hit 20,000 point in one and a half years time. the reasons for the above statement are given below:

The fan line III described in the last article (Mark4.shtml) was broken upside in the past few days. This has significant technical meaning because according to the three fan rule, when the third fan was broken upside, the down move (in this case) should be ending.
The chief executive, Mr. Tung, of Hong Kong SAR government has announced to scrap the plan and annual target of building 85,000 housing units. Although such delayed announcement on such an important policy is a big blow to the authority and image for Mr. Tung and the SAR government, it does boost confidence for the very weak sentiment of the real estate market which is the major economic base of Hong Kong.
Now Mr. Tung's rating is so low that he should worry about his own survival, and not to grant overhaul plan on many fronts which created so many problem for him. I feel that his only way out of this mess is to boost Hong Kong's economic situation especially the very low price level of the property market so that middle class professionals can build more positive assets.
Hong Kong's economic outlook is very good as indicated by export and other economic figures, so Hong Kong is still in the growth phase. This is consistent with the outlook that the HSI dropping from 18,400 to 13,700 was only a major correction as suggested in the first article of this series (mark1.shtml). Now the bull run will continue after the correction.
Hong Kong stock market normally is influenced by US market. DJI has formed a diamond formation evolving from a broadening formation. This seems to indicate that the US market is not going to go down. After enough sideward movement, will start another round of upward move soon.

Suggestions:

One should now close all account of short selling, and start or get ready to get back into the market. On timing of buying, I expect that the HSI will come back down soon to make a "kiss good bye" behavior which happened several time in the downward move in the past four months. This time the downward kiss good bye will be on a support level on or above the Fan Line III, then the HSI will go up in leaps and bounce. Therefore, this next trough is the best opportunity to buy.

The following is a chart presented in article mark4.shtml. The fan line III is clearly broken now with HSI above 17,000.

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.