Shanghai: SSE Composite Index (.SSEC) benchmark retreats to five-month low

Shanghai: SSE Composite Index (.SSEC) benchmark retreats to five-month low

Shanghai: SSE Composite Index (.SSEC) benchmark retreats to five-month low

China’s stocks dropped to the lowest level in five months after the US designated the Asian nation as a currency manipulator and Beijing suspended procurement of American agricultural products as the trade war flared up between the world’s two largest economies.

The Shanghai Composite Index fell 1.6 per cent to 2,775.14 on Tuesday, with the benchmark capping a 5.9 per cent, five-day loss and closing at the lowest level since February 21. Hong Kong’s Hang Seng Index lost 0.7 per cent to 25,976.24, clawing back an intraday loss of as much as 2.9 per cent, as Beijing’s top policy office on the city’s matters held a second press conference since protests began on June 9.

The escalating tension between China and the US roiled financial markets across the world in overnight trading, sending stocks from New York to Europe plunging and prompting traders to take shelter in gold.

The US Treasury Department officially labelled China as a currency manipulator after the yuan weakened below 7 against the US dollar on Monday, which was seen as a countermeasure taken by Beijing against the imposition of new tariffs on US goods. Meanwhile, China said it had suspended buying US farm produce and might levy tariffs on goods bought after August 3.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 2,859.22.

The projected lower bound is: 2,691.29.

The projected closing price is: 2,775.26.

Candlesticks

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 25 white candles and 25 black candles.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 5 falling windows in the last 50 candles–this makes the current falling window even more bearish.

A long legged doji occurred. If this occurs during an uptrend it often signifies a top.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 12.8048. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 4 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 27.60. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 61 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 -252.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -43.940 at 2,777.556. Volume was 2% below average (neutral) and Bollinger Bands were 34% narrower than normal.

Open     High      Low     Close     Volume___
2,776.9892,787.4182,733.9242,777.55623,112,372,224
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 2,900.67 2,927.07 2,823.13
Volatility: 17 18 26
Volume: 15,834,556,416 18,484,545,536 22,746,013,696

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.

Summary

SSE COMPOSITE gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.

SSE COMPOSITE is currently 1.6% below its 200-period moving average and is in an downward trend. Volatility is low 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 15 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an oversold condition.

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