INVESTMENT DAILY

The Hang Seng Index is expected to trade at 23,300 to 23,700today.

    Hong Kong market gained strong momentum on Tuesday. HSI opened higher by 46points and extended gains then, it surged 377 points to close at 23,520. HSCEI alsoclimbed 237 points to close at 10,549. Market turnover increased to HK$67.7bn.

    China banking stocks, China insurance stocks and China telecom stocks were themajor drivers of the market. Ping An (2318 HK) and China Life (2628 HK) rallied3.2% and 2.5%, respectively. Market expecting the merger of CSR (1766) and CNR(6199), stimulate railway plays performed strong, with China Railway (390) andChina Railway construction (1186) both gained 6%.

    US stocks moved higher on Tuesday following solid earnings reports from. Pfizer,couple with Sweden's central bank cuts benchmark interest rate to zero, andexpecting Federal will finish purchase bond and remain low interest rate. Dows andNasdaq advanced 187 and 78 points to 17,005 and 4,464 respectively. Commoditiesslightly rebound, with Brent Oil inched up 0.1%, international gold price addedUS0.6 to US$1,229.5.

    Thanks A-share market IPO funds were unfrozen, couple with the expectation ofreform, help to improve the A-share market investment sentiment, and ShanghaiComposite saw the largest gains in past three months, boosting Hong Kong stockregained 250DMA, couple with strong performance of US stock market, both shouldsupport the HK market in short term, the first resistance would be seen at 100DMA(23,892).

    Technical Analysis.

    Hang Seng Index opened higher and closed with white candle on Tuesday,Technically, index regained 10DMA (23,193), 20DMA (23,196) and 250DMA(23,177), couple with the MACD bullish gap expanded, showing that momentumturned stable. Hang Seng index first support would be 250DMA (23,177), while nextsupport would be at seen at 23,000. For resistance, 100DMA (23,892) would becomethe first resistance, while next resistance would be seen at 24,000.