Trade Update: Hang Sang-HCI SHORT Position Has Hit Our First Take Profit Target at $27,000 / a 900 points move! What to do now?
Our SHORT position on China Hang Sang Index (HSI) from January 23rd at 27,900, following the outbreak of the deadly Corona Virus, has hit our First Take Profit level at 27,000. We book a 900 points move within 6 trading days, while the hang Sang crash down! Looking at the charts (see below) and the continued economic deterioration due to the country transportation lock-down, we look for the HSI to continue its crash down to our second profit target at 26,000. In any case this trade will now remain profitable as we protect our remaining position with a stop loss order at 27,500.
January 23rd Signal: About the Virus: The Corona Virus originated in a seafood market in Wuhan conducting illegal transactions of wild animals, authorities have said. The market has been shut down since the corona virus outbreak, which caused for more than 500 confirmed cases and 17 people that have died. Today we learn about a sense of anxiety that in Wuhan as the Chinese city (11 million people!) goes into lock-down in an effort to control the spread of the virus. The authorities have suspended all public transportation, including planes, subways, ferries, buses and trains that goes in and out of the city.
Accordingly, investors fear the implications on the economy and the potential for wide spread of the virus. Currently China’s Hang Seng Index (HSI) is trading at 27,910 and is trending down after hitting resistance at 29,000. We believe that more investors will sell the HSI in order to remove the potential risk from their portfolios, until we hear more positive constructive news about the virus spread. Traders can take advantage of this situation and sell SHORT the HSI and look to Take Profit as the Index decline down to 27,000 and a second profit target down at 26,000.
Look at the two charts below to view how to trade the HSI Index