Shanghai: SSE Composite Index (.SSEC) Analysts say traders want clear signals from US and China on resolving their differences
Hong Kong and China stocks continued to get hammered Tuesday, with pharmaceuticals hit hard by a broad audit of drug makers. Agricultural shares were pounded by worries about the pig-killing African swine fever, as well as a pestilent worm that is eating corn and other crops.
Hong Kong’s Hang Seng Index declined for the fifth consecutive day, as the city’s benchmark dropped 0.5 per cent to 26,761.52, retreating 2.3 per cent in five days. The Hang Seng China Enterprises Index, which tracks the performance of Chinese companies in Hong Kong, fell 0.9 per cent to 10,341.12.
Shares retreated in mainland China, with the Shanghai Composite Index closing nearly 1 per cent down to 2,862.28.
The technology-heavy Shenzhen Composite Index declined 1.4 per cent to 1,494.15 over concerns that the trade war’s spillover to a dispute over technology – underscored by US ban on hardware, software and services to China’s Huawei Technologies – would hurt more suppliers and vendors listed on the exchange.
On the Shanghai benchmark, every sector fell, with the biggest declines seen in consumer staples, down 2 per cent, health care, down 1.9 per cent, and information technology, down 1.6 per cent.
By the close, 1,178 stocks on the benchmark declined, while only 282 rose and 51 were unchanged.
Big losers falling by the daily 10 per cent limit included Gansu Dunhuang Seed Group, down to 7.62 yuan, Xinjiang Talimu Agriculture, falling to 5.93 yuan, and Zhongnongfa Seed Industry Group, which closed at 3.91 yuan.
They and other agriculture stocks tended to do poorly Tuesday, as China deals with a double whammy of African swine fever threatening the country’s hog population while the fall armyworm chomps its way through cash and food crops.
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 2,951.53.
The projected upper bound is: 2,993.42.
The projected lower bound is: 2,722.00.
The projected closing price is: 2,857.71.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 black 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 36.9422. This is not an overbought or oversold reading. The last signal was a sell 12 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 38.87. 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 17 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 -84. 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 6 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -27.801 at 2,862.280. Volume was 38% below average (neutral) and Bollinger Bands were 66% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 2,887.11 3,043.59 2,778.10
Volatility: 14 29 27
Volume: 19,889,594,368 29,648,246,784 21,371,729,920
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 3.0% above its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 25 periods.
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