Investment Note 9/6/2025

Last Friday, the Hang Seng Index opened 34 points higher at 23,941 points, then fluctuated and weakened, falling 133 points to 23,773 points at one point, and fell 114 points or 0.47% to 23,792 points for the whole day; the Technology Index fell 33 points or 0.62% to 5,286 points. The main board turnover was HK$235.6 billion.

The Hang Seng Index has recently fluctuated between 23,000 and 23,800 points. The return of northbound funds (southbound funds) provided some support to the market, but the relatively weak performance of technology stocks limited the upside of the index. China and the United States still maintain good relations and tend to resolve trade conflicts, but since the market had certain expectations earlier, the stimulus to the stock market was limited. In addition, the performance of blue-chip technology stocks was not too surprising, which made the market rise to 24,000 with certain resistance. It is expected that the Hang Seng Index will be in the range of 23,100 to 24,000 points this week. However, as can be seen from the Hang Seng Index monthly chart, the middle axis of its Bollinger Band continues to move upward, and I believe the market outlook is still favorable.

If the Hang Seng Index rebounded from the low of 19,260 points on April 9 and has accumulated 24.13% to date, it has theoretically entered a "technical bull market". If the trend of Hong Kong stocks in recent years is followed, there seems to be room for further upward movement. In fact, the Hang Seng Index has rebounded since January last year and has maintained a trend of one wave higher than the other. It is worth noting that, excluding this time, Hong Kong stocks have experienced three larger rising waves in the past year and a half, namely from January to May 2024, from August to October 2024, and from January to March this year, which takes an average of about 3 months, and each time recorded an average increase of about 33%. Based on this calculation, it is expected that the Hang Seng Index may reach 26,200 points before the fourth quarter, which is about 10% higher than the current potential upside, equivalent to the top of the rising channel extended in January last year, and also the golden ratio of 61.8% from the historical high of 33,484 points in January 2018 to the bottom rebound in October 2022.

The latest US employment data was better than expected, alleviating concerns about economic slowdown. US stocks rebounded significantly on Friday. After the Dow opened 312 points higher, the increase expanded to 604 points, reaching a high of 42,924 points. The S&P 500 rose by as much as 1.31%, and the Nasdaq rose by 1.53%. The three major indexes slowed down their gains at the close, but still recorded an increase of more than 1%.

At the close of the US stock market, the Dow rose 443 points, or 1.05%, to 42,762 points; the S&P 500 rose by 61 points, or 1.03%, to 6,000 points; and the Nasdaq soared by 231 points, or 1.2%, to 19,529 points. Last week, the Dow rose 1.2%, the S&P 500 rose 1.5%, and the Nasdaq rebounded 2.2%.

The US dollar index rose by as much as 0.62% to 99.357, and the Japanese yen fell by 1.09%, hitting a low of 145.09 per dollar. Bitcoin rose 4.7% to $105,322.