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Hong Kong shares eke out 10th straight gain, China sinks

* HSI +0.2 pct, H-shares -0.2 pct, CSI300 -0.7 pct

* Chart resistance, oversold markets point to fading rally

* Macau gaming sector strong after positive Wynn, Galaxy Q3 earnings

* Profit taking in recent outperformers HK property, HKEx

HONG KONG, Oct 25 (Reuters) - Hong Kong shares eked out a tenth straight gain on Thursday, but a rally that has taken the Hang Seng Index to 2012 highs showed signs of fatigue as investors took profits on outperformers.

The Hang Seng Index ended up 0.2 percent at 21,810.2 points, its highest close since early last August and equalling a winning streak recorded in June 2006.

Up 14 percent from a Sept. 5 low and 18 percent on the year, the market now faces stiff chart resistance. The 14-day relative strength index (RSI) hovered at two-year highs, suggesting the market is overbought.

In the mainland, the CSI300 Index of the top Shanghai and Shenzhen listings closed down 0.7 percent at its lowest since Oct. 8. The Shanghai Composite Index shed 0.7 percent.

``You have to realize we are now in the fourth quarter, so hedge fund managers will now be looking to lock in some profits after the rally from early September,'' Hong Hao, chief equity strategist at Bank of Communication (BoCom) International Securities, told Reuters.

``Institutional investors are still very hesitant, and without them, it's going to be difficult to see the rally carrying on from here,'' Hong said, adding a positive set of Chinese economic data for October would help.

China's factory output should grow faster in the last three months of 2012 than in the third quarter, though the recovery remains clouded by uncertainty in export markets, the Ministry of Industry and Information Technology said on Thursday.

On Thursday, the Macau gaming sector was the standout outperformer after Wynn Macau and Galaxy Entertainment posted third-quarter corporate earnings that bettered expectations.

Galaxy jumped 3.6 percent, while Wynn Macau rose 2.5 percent and Sands China gained 3.5 percent.

Chinese oil major CNOOC Ltd rose 1.4 percent after posting an encouraging 4.7 percent increase in third quarter unaudited oil and gas sales revenue, which were largely in line with market expectations.

In a report on Thursday, CICC analysts raised their target price for CNOOC from HK$17 to HK$18, saying they expect to see improved output from China's top offshore oil and gas producer.

EARNINGS, EARNINGS...AND FADING RALLY MOMENTUM?

HSBC Holdings, Europe's largest bank and the Hang Seng Index's largest component, rose 1 percent to close at its highest since early August, returning to a chart level that has limited its rise in the past week.

HSBC is the Hang Seng Index's biggest component stock. This, along with looming chart resistance for the China Enterprises Index of the top Chinese listings in Hong Kong, further suggest the 10-day rally could be running out of steam.

Recent outperformers, bourse operator Hong Kong Exchange (HKEx) and the Hong Kong property sector were weaker as investors trimmed recent strong gains made on expectations that capital inflows into the city could buoy property prices.

HKEx slipped 0.6 percent, while Cheung Kong Holdings shed 0.4 percent and Henderson Land lost 0.9 percent.

Ahead of its third-quarter earnings, Bank of China (BOC) rose 1 percent to its highest since May 3 in Hong Kong. After market close, China's fourth-largest lender by market value, posted a forecast-beating 16.7 percent net profit rise.

BOC, the first of the ``Big Four'' Chinese banks to post third quarter earnings, is up 10.1 percent in 2012 and is currently trading at a 46 percent discount to its 12-month forward price-to-book value, according to Thomson Reuters StarMine.

China Unicom rose 1.8 percent before the country's second-largest mobile operator posted after market close a 27-percent jump in third-quarter net profit, missing expectations.

It is down 15.8 percent in 2012 after surging 47 percent in 2011 and is currently trading at a 28 percent premium over its 12-month forward earnings multiple, according to StarMine.

Before earnings were posted, three of 31 analysts have shaved their 2012 full year earnings-per-share estimate for China Unicom by an average of 19.3 percent over the last 30 days, according to StarMine.