Shanghai: SSE Composite Index (.SSEC) boosted by consumer stocks
Better earnings reported by luxury brands boosted sentiment in the Hong Kong and China stock markets on Monday, with all mainland Chinese gauges finishing higher on the first trading day of the Year of the Pig.
The benchmark Shanghai Composite Index had traded flat during most of the morning session, but steady gains during the afternoon led it to a gain of 1.36 per cent, or 35.67 points. The gauge closed at 2,653.9, extending gains made over the three days before the Lunar New Year holiday. Its daily turnover stood at 137.3 billion yuan (US$20.2 billion). In Hong Kong, the Hang Seng Index closed up 0.71 per cent, or 197.52 points, at 28143.84. The turnover on its mainboard stood at HK$84.13 billion (US$10.7 billion).
Consumer stocks led the gains, with liquor stocks finishing the day as top gainers in Shanghai as well as Shenzhen. In Shanghai, Kweichow Moutai rose 4.7 per cent to 725.3 yuan; in Shenzhen, liquor stock Wuliangye Yibin closed 5.7 per cent higher at 64.7 yuan, its highest level since October 2018. Wuliangye has risen by 25 per cent this year, according to Bloomberg.
Electronics giant Midea Group, another consumer stock, was up by 4.1 per cent at 46.98 yuan in Shenzhen, while Wens Foodstuffs Group was up by 6.57 per cent at 30 yuan. The Shenzhen Component Index ended 3.06 per cent, or 235.05 points, higher at 7919.05. Its turnover reached 182.6 billion yuan.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 2,729.07.
The projected lower bound is: 2,579.06.
The projected closing price is: 2,654.07.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 75.2831. This is not an overbought or oversold reading. The last signal was a sell 9 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 65.73. 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 74 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 211.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 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 20 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 35.664 at 2,653.896. Volume was 1% above average (neutral) and Bollinger Bands were 39% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,597.76 2,570.38 2,772.43
Volatility: 14 18 24
Volume: 14,616,557,568 14,279,109,632 14,062,807,040
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 4.3% below its 200-period moving average and is in an upward 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 bullish on .SSEC and have had this outlook for the last 14 periods.
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