Shanghai: SSE Composite Index (.SSEC) bullish mood that was starting to build in China will be tested

Shanghai: SSE Composite Index (.SSEC) bullish mood that was starting to build in China will be tested

Shanghai: SSE Composite Index (.SSEC) bullish mood that was starting to build in China will be tested

The bullish mood that was starting to build in China will be tested when markets reopen Monday as concern over the U.S. trade relationship resurfaces.

For clues on how investors may react, look to Hong Kong, where Chinese equities just had their first back-to-back loss of the year and the offshore yuan fell against the dollar over the week. A drop in a U.S. fund tracking A shares also indicates caution could spread onshore after the five-day break, while the greenback’s run of gains is likely to weigh on China’s currency.

The CSI 300 Index rose 7.9 percent this year through Feb. 1, reversing its December losses as investors took comfort from Beijing’s measures to support the slowing economy and risk assets gaining favor around the world. But trade clouds could now persist into March after Donald Trump said he won’t meet Xi Jinping before the imposition of new U.S. tariffs on Chinese goods.

“Worst case, the talks could break down,” Bank of America Corp. strategists including David Hauner wrote in a Feb. 7 note. “More likely, the deal could be too vague to be credible, or the Feb. 28 deadline could be postponed, extending the uncertainty. February brings several potential bumps for the EM and global risk rally.”

Overall, the bias in prices is: Sideways.

The projected upper bound is: 2,691.05.

The projected lower bound is: 2,544.09.

The projected closing price is: 2,617.57.

Candlesticks

A white body occurred (because prices closed higher than they opened).
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 26 white candles and 24 black candles for a net of 2 white candles.

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 46.6495. This is not an overbought or oversold reading. The last signal was a sell 8 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 60.07. 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 73 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 126.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 3 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 buy 19 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 33.660 at 2,618.232. Volume was 14% below average (neutral) and Bollinger Bands were 46% narrower than normal.

Open High Low Close Volume___
2,597.7782,618.4772,590.5542,618.23213,198,685,184

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 2,593.42 2,570.21 2,774.96
Volatility: 13 18 24
Volume: 14,701,819,904 14,267,929,600 14,049,133,568

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 is currently 5.6% below its 200-period moving average and is in an upward 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 bullish on .SSEC and have had this outlook for the last 13 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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