Profit taking activities were observed in US equities last night, which were dragged by lower crude oil prices as data showed Iraq and US output are climbing. Energy (-1.48%) and utilities (-1.38%) were among the worst performers. A similar profit-taking pattern, especially in the energy sector, may repeat in the Asian market today.
Crude oil prices were hammered last night. WTI crude Feb contract was down almost 4% to the $52.0 area – its lowest level in two weeks. Iraq’s Dec output hit a record high of 3.51 million barrels per day, which led to rising doubts about their commitment to cut production. Although Iraq’s oil minister underscored that the country will lower production in January to comply with the OPEC agreement, we should keep a close eye on it.
Crude Oil WTI - Feb
Hang Seng index facing consolidation, but “super trend” is turning bullish
The Hang Seng Index rebounded almost 5% since end Dec, making it one of the best performing markets in Asia. It is currently challenging the 50 Day Simple Moving Average at around the 22,500 area and is facing some resistance here. But the “super trend” is turning bullish for the first time in four months. This shows there could be more upside in the coming weeks.
The immediate resistance levels for the Hang Seng could be found at around 23,200 and 24,000 respectively. We may see a short consolidation now, until this Friday’s Chinese trade balance data reveals more clues to future direction.
Hong Kong 50 - Cash
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.