Shanghai: SSE Composite Index (.SSEC) is expected to release key December economic data today
Chinese stocks retreated for a third day, as traders looked past the tentative truce in the US-China trade war to focus on lingering issues that could still fray the relationship between Beijing and Washington.
The Shanghai Composite Index dropped 0.5 per cent, or 15.96 points, to 3,074.08 on Thursday, taking the three-day decline to 1.3 per cent. Hong Kong’s Hang Seng Index fared better, rising 0.4 per cent to 28,883.04.
While officials from China and the US hailed the signing of the phase one trade deal that would require the Asian nation to do more to protect intellectual property and increase procurement of American goods, some investors including JPMorgan Asset Management said markets may still be primed for wild swings on possible further friction in the future.
“Highly sensitive issues like the US’ export ban on several Chinese companies, increased scrutiny on Chinese investments abroad, and China’s application of its commitment to treat foreign and domestic business alike within China are likely to make headlines throughout the year,” said Hannah Anderson, a strategist for global markets at the asset management firm. “Markets will likely continue to price in an elevated risk premium, which could be a source of volatility throughout 2020.”
Traders were also awaiting the release of China’s key economic data on Friday, including full-year economic growth for 2019. The economy may have expanded by more than 6 per cent last year, Vice-Premier Liu He said in an interview with the state-run Xinhua news agency after he signed the trade agreement in Washington.
Media and insurance stocks were among the biggest decliners on the mainland. People.cn, the news portal run by the Communist Party’s People’s Daily, tumbled 8 per cent to 24 yuan and Xinhuanet, owned by Xinhua, sank 6.2 per cent to 30.31 yuan. China Life Insurance dropped 2.5 per cent to 33.92 yuan.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 3,002.88.
The projected upper bound is: 3,137.43.
The projected lower bound is: 3,014.55.
The projected closing price is: 3,075.99.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 37.2159. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 58.30. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 2 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 11. This is not a topping or bottoming area. The last signal was a sell 6 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 0 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -15.957 at 3,074.081. Volume was 14% above average (neutral) and Bollinger Bands were 23% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 3,091.26 2,973.17 2,967.41
Volatility: 12 13 20
Volume: 24,486,895,616 18,483,011,584 20,395,212,800
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
SSE COMPOSITE is currently 3.6% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into .SSEC (mildly bullish). Our trend forecasting oscillators are currently bullish on .SSEC and have had this outlook for the last 24 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.