Shanghai: SSE Composite Index (.SSEC) stocks plunge over virus scare
Hong Kong equities tumbled on Thursday morning trade as investors took flight over the deadly Sars-like virus that has spread from the mainland.
The Hang Seng Index fell 1.7 percent, to 27,872 at the break.
On the mainland, the Shanghai Composite Index fell 2.4 percent, to 2,985, while the Shenzhen Composite Index dropped 2.01 per cent to 1,781.
Tokyo was 0.6 percent lower. Sydney and Seoul both fell 0.6 percent but Taipei was up 0.2 percent.
“China’s importance in the overall global supply chain and the fact they are a huge export market for many countries… opens up a more unfavourable global outcome this time around,” Stephen Innes, chief market strategist of AxiCorp, said in a note.
Oil prices were hit hard in overnight trade with both major indexes down by more than one percent.
“Given the importance of China for oil demand and having the outbreak falling on the cusp of peak domestic travel season, the timing is particularly damaging,” Innes said.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 3,048.02.
The projected lower bound is: 2,907.89.
The projected closing price is: 2,977.95.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 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 26.6108. This is not an overbought or oversold reading. The last signal was a buy 3 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 38.69. 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 7 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 -288.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 11 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 5 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -84.226 at 2,976.528. Volume was 53% above average (neutral) and Bollinger Bands were 3% narrower 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: 3,073.95 2,984.93 2,966.44
Volatility: 19 15 19
Volume: 21,889,701,888 19,339,288,576 20,027,449,344
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 0.3% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 29 periods.