Hang Seng and major Chinese indices are going to be tested immensely with massive selling pressure as the virus continues to worsen; latest updates show contagiousness even before individuals show any sign of symptoms which is exacerbating the worry level in China and around the world. With rising cases, it is likely the WHO will declare a global emergency and when/if this happens that will sharpen the equity declines.
The markets, as overbought as they are around the world, particularly in the US, a 5% pullback cannot be ruled out.
As for the Hang Seng, the first target is roughly 27,150 with a 2nd target around 26,500. If the latter target fails we could see the Hang plummeting to 26,000 or lower.
In the long-term the markets will rebound, however it may be many weeks before the markets grapple with this. While in the past markets were able to rebound from H1N1, Ebola, Sars, etc, it is important to note the markets were not nearly as overbought as they have been (particularly the US markets). It cannot be ruled out that the SPX can fall to the 3026 level if this is not contained quickly. At this point, it seems that it will take a while to contain.
With a trade war still somewhat present, and a fragile global economy, this outbreak certainly has came at a very poor time.
- zSplit
The markets, as overbought as they are around the world, particularly in the US, a 5% pullback cannot be ruled out.
As for the Hang Seng, the first target is roughly 27,150 with a 2nd target around 26,500. If the latter target fails we could see the Hang plummeting to 26,000 or lower.
In the long-term the markets will rebound, however it may be many weeks before the markets grapple with this. While in the past markets were able to rebound from H1N1, Ebola, Sars, etc, it is important to note the markets were not nearly as overbought as they have been (particularly the US markets). It cannot be ruled out that the SPX can fall to the 3026 level if this is not contained quickly. At this point, it seems that it will take a while to contain.
With a trade war still somewhat present, and a fragile global economy, this outbreak certainly has came at a very poor time.
- zSplit
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.