Shanghai: SSE Composite Index (.SSEC) stocks firm as investors expect more stimulus measures
China stocks on Wednesday started the second quarter of the year on a firm note, as investors expected more stimulus measures to counter the economic impact from the coronavirus pandemic.
At the midday break, the Shanghai Composite index was up 0.3% at 2,758.66 points.
China’s blue-chip CSI300 index rose 0.69%, with its financial sector sub-index higher by 0.88%, the consumer staples sector down 0.11%, the real estate index climbed 1.92% and the healthcare sub-index down 0.69%.
Chinese H-shares listed in Hong Kong dipped 0.29% to 9,567.19, while the Hang Seng Index was down 0.92% at 23,385.41.
China will step up fiscal and monetary policy adjustments to combat the impact of the global coronavirus outbreak, state media reported on Tuesday, quoting a cabinet meeting chaired by Premier Li Keqiang.
Fresh measures by Beijing on infrastructure funding, targeted credit for SMEs, and EV subsidies echoed the view that the Politburo meeting on Friday has given a green light to more policy responses, both fiscal firepower and monetary policy tools, analysts at Morgan Stanley said in a report.
China’s factory activity improved in March after plunging a month earlier, a private survey showed on Wednesday, but the bare minimal growth highlighted the intense pressure facing businesses as the global coronavirus pandemic shuts down many countries.China will start releasing information from Wednesday on coronavirus patients who show no-disease symptoms, ordering them into quarantine for 14 days, a health official said, after the mainland witnessed its first rise in infections in five days.
Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.06%, while Japan’s Nikkei index was down 1.75%.
The yuan was quoted at 7.0886 per U.S. dollar, 0.11% weaker than the previous close of 7.081.
As of 0414 GMT, China’s A-shares were trading at a premium of 26.18% over the Hong Kong-listed H-shares.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 2,888.74.
The projected upper bound is: 2,910.64.
The projected lower bound is: 2,584.39.
The projected closing price is: 2,747.51.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
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 45.7564. 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 41.50. 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 buy 40 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 -3. This is not a topping or bottoming area. The last signal was a buy 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 buy 2 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 4.261 at 2,754.557. Volume was 41% below average (neutral) and Bollinger Bands were 82% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,740.11 2,909.50 2,935.85
Volatility: 30 36 23
Volume: 24,169,660,416 30,427,856,896 20,964,397,056
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 6.2% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .SSEC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .SSEC and have had this outlook for the last 12 periods.