CFD Trading 11 March 2019

Singapore Exchange Stock code S68.SGX

Outlook

Price has declined on the news that HK Exchange and Clearing LTD has signed an agreement with MSCI to offer futures contracts on the MSCI China A Index, giving global investors a tool to hedge their investment in Asia’s largest equity market. This could divert trading of SGX’s FTSE China A50 index futures contracts to Hong Kong. SGX’s China A50 is currently the only futures contract tracking China’s A shares. The China A50 futures contract is SGX Derivatives top active contract with 7.49M contacts traded in the month of Jan 2019. This volume is almost 54% of the total equity index futures volume of 13.77M in the month of Jan 2019. Should Hong Kong manage to divert 50% of this volume away from SGX; it would be a huge drain on SGX’s revenue and profitability. Price has broken below the support at $7.50 and the next strong support is at $7.00. For technical analysis, please refer to 8th Mar 2019 CFD Trading Note.

Strategy

$7.52 Short Sell
$7.00 Price Target
$7.82 Risk Management Stop
3 weeks Trade Duration

Hong Kong Exchange Code 0388.HKE

Outlook

Price found support at HK264.00, which was the gap of 2 candles body. With news of its impending launch of MSCI China A Index, price has gone up by HK5.60 yesterday. Currently price trend is strong as the gradient of price advance has been steep. Price is currently above the cloud and the Base line, which are signs of a bullish trend. MACD has not shown any divergence warning of a high as yet. Both MACD lines are far away from and above the zero line, which is a hint of a strong trend. It means price could go higher to the next resistance point at HK292.00

Strategy

HK272.00 Buy
HK292.00 Price Target
HK263.90 Risk Management Stop
3 weeks Trade Duration

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