Shares of Chinese Companies Surge
As evidenced by todays Hang Seng chart (Hong Kong 50 on FXOpen), this stock index has risen to a yearly high.
Bullish sentiment in the market is bolstered by promises from China's top leadership, including President Xi Jinping, to achieve the growth target for 2024 and to halt the decline in the real estate market.
Bloomberg News reported that China is considering injecting up to 1 trillion yuan of capital into its largest state lenders to enhance their capacity to support the recovery of the Chinese economy. This proposal is part of broader stimulus measures launched by the Peoples Bank of China earlier this week.
Technical analysis of the Hang Seng index chart (Hong Kong 50 on FXOpen) indicates that the price is making a significant upward reversal:
This month, the price broke above the trendline (marked in red), which dates back to 2021.
Evaluating the angles of decline (indicated by grey arrows), it is evident that the rate of downward impulses has been consistently slowing over time, indicating exhaustion of selling pressure.
Price action in 2024 provides grounds to construct an upward channel (shown in blue). Its possible that the upper boundary could be reached by the end of the year.
Lets remember that we established a long-term upward channel in January of this year, and todays price action on the Hang Seng (Hong Kong 50 on FXOpen) confirms its relevance.
Read more: https://fxopen.com/blog/en/oa-shares-of-chinese-companies-surge/
Text source: Forex Trading Blog
