Hang Seng forms death cross as Kospi and Nikkei hit records
Hang Seng fell to 23,445 after a death cross on June 22, its lowest since last June, while South Korea’s Kospi and Japan’s Nikkei 225 reached record highs.
On June 22 the Hang Seng Index fell to 23,445 after its 50-day moving average crossed below the 200-day moving average, forming a death cross. The level was the index’s lowest since June last year and about 16% below its all-time high.
The index slipped below the 25,158 neckline of a head-and-shoulders pattern. The distance between the head and the neckline is roughly 2,858 points; subtracting that from the neckline yields a technical target near 22,300. The Hang Seng trades below its Ichimoku cloud and Supertrend line, and the Average Directional Index has risen, indicating the downtrend has strengthened.
The Hang Seng’s decline came while South Korea’s Kospi and Japan’s Nikkei 225 reached fresh record highs on the same day. Gains in those markets were concentrated in companies supplying hardware for artificial intelligence, including SK Hynix and Samsung in South Korea and Kioxia, Furukawa Electric and Taiyo Yuden in Japan. Kioxia has risen about 850% this year and roughly 5,147% over the past 12 months. U.S. memory and storage names such as Micron, SanDisk and Western Digital also recorded strong gains.
Major Chinese technology firms listed on the Hang Seng are mainly on the demand side of the AI supply chain. Alibaba, Tencent, Xiaomi and Kuaishou have increased AI-related spending while facing higher input costs for memory and other semiconductors. Alibaba’s reported profits fell by more than 80% in the latest quarter, and Xiaomi has been affected by rising memory prices. Lenovo, a provider of servers and storage, has gained about 153% year to date.
Other large Hang Seng components weakened for separate reasons. Electric-vehicle manufacturers BYD and Li Auto declined about 30% and 23%, respectively, after authorities reduced some industry subsidies. Those falls have contributed to the index’s overall drop.
Technical patterns identified include the completed head-and-shoulders formation and the death cross, and the rising ADX points to increasing trend strength. The Hang Seng remains below several medium- and long-term trend indicators while several regional indices continue to post record levels driven by semiconductor and hardware suppliers.
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