Weekly Updates 14/8/23 – 18/8/23 August 14, 2023
This weekly update is designed to help you stay informed and relate economic and company earnings to potentially value-add your CFD (Contract For Difference) trading via hedging (risk reducing). This article should be used for educational purposes only and not as financial advice. We urge all traders to carry out your own due diligence before submitting trades.
Recap for last week (07 Aug 2023 – 11 Aug 2023)
*These prices are taken based on the previous Monday’s opening price and the preceding Friday’s closing price.
Last week’s market action revolved around CPI data coming out of the US and a range of macro data coming out of China. With disappointing data coming out of China, Hang Seng Index and Hang Seng Tech Index are set to close lower for the week (-3% to -6.5%). While US CPI came in slightly lower than expected, causing a short rally in the major US indexes. Market participants are eyeing on the potential decrease of interest rates from the China Central Bank as a way of stimulating the economy while having low inflation.
Updates for the week (14 Aug 2023 – 18 Aug 2023)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week’s macro news mainly focuses on US Fed meeting minutes, retail sales advance, Industrial Production, housing data and China Industrial production and retail sales. Traders and Investors are looking for more data coming out of China to paint a bigger picture and weigh the policy response that China Central bank and government can use. While US macro news will allow market participants to know more on the resilience of the US consumer spending and Industrial production. Data that will influence forecasts of the economy be it a soft landing or a hard landing.
This week’s corporate earnings releases are mixed with PropNex and Sea Limited from Singapore to Tencent and JD.com from China and even xPeng the China EV car maker. Sea Limited has seen their share price deteriorate over the past few months from negative sentiment and weak fundamentals, investors and traders are looking at Sea Limited’s corporate earnings tightly on Tuesday to find any glimmer of hope and positive signs. With Alibaba releasing better than expected results, eyes are on Tencent and JD.com to follow through the trend.
If you hold equity positions in these stocks, you can hedge your positions using CFDs to mitigate the risk of disappointing earnings releases.
For those looking to speculate or capitalize on the increased volatility, CFDs provide leverage and ease of going long and short across a broad range of products available.
Ping An Insurance (2318.HK): Potential Trading Opportunity
Key Entry Price Pivot(s):
- 48.50
Recommended Trade:
- Long when it pull back to support level 48.50, take profit at 57.50, stop loss at 45
Alternative Case:
- Short below 44, take profit at 40, stop loss at 46
Remarks:
- Ping An Insurance had recently broken out the downtrend channel.
- We are waiting for it to pull back and found support at the 48.50.
- We potentially look to take a long trade on Ping An Insurance when forming a bullish bar at the support level to continue the uptrend moving ahead.
EUR/USD needs to clear 1.1050 hurdle to attract bulls
Recommended Trade:
- Stay Long above 1.1050 handle, take profit above 1.1200, tight stop loss at 1.1000.
Alternative Case:
- Short at 1.0980 for a view that the pair will not break Key Resistance, take profit at 1.0850, stop loss at 1.1060.
Remarks:
- EUR/USD bears pushed the pair to close below 1.1000 handle on Friday, after climbing above 1.1060 on Thursday, its highest level in two weeks. The Euro Stoxx Index is down more than 1% in the European morning and US stock index futures trade flat on the day, preventing EUR/USD to gain traction.
- Technically, the pair is still on an uptrend. However, this needs confirmation with price action pulling above the SMA20 at the key resistance level of 1.1050. With this, the RSI should also be dragged higher, above the 50 level, to bring it into the Buy Zone. EUR/USD bulls can wait for these technical confirmations to be prudent.
If you have any feedback or questions, feel free to email us at samht@phillip.com.sg or onishathyeyn@phillip.com.sg or cfd@phillip.com.sg.
Disclaimer
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About the author
Sam Hei Tung (Dealing) and Onisha Thye (Dealing)
Sam graduated from National University of Singapore with a Master of Science in Finance. He personally manages his own investment portfolio and does equity and economic research in his free time. Sam believes that education and information is essential to making good financial decisions.
Onisha is a dealer at the CFD Dealing Desk. She graduated from Monash University with a double major in finance and econometrics. Her natural curiosity for finance is what drove her to be in this field as she is fascinated by all the possibilities and opportunities that are available to grow one’s wealth, either through trading or investment.
