Shanghai: SSE Composite Index (.SSEC) caution dominated the equity markets amid intensifying worries over the US-China rivalry on technology

Shanghai: SSE Composite Index (.SSEC) caution dominated the equity markets amid intensifying worries over the US-China rivalry on technology

Shanghai: SSE Composite Index (.SSEC) caution dominated the equity markets amid intensifying worries over the US-China rivalry on technology

Stock indexes in Hong Kong and mainland China fell for the second day, as caution dominated the equity markets amid intensifying worries over the US-China rivalry on technology, with tech stocks leading the decline.

The Shanghai Composite Index fell 0.3 per cent to 2,905.81, having hovered around the 2,900 level for more than three weeks since the US-China trade war flared up after a fruitless attempt at a resolution, and tit-for-tat tariffs kicked in.

Shenzhen’s Composite Index retreated 0.6 per cent to 1,532.03 while the ChiNext Index of start-ups dropped 0.8 per cent.

The CSI 300 Index of large companies was down 0.6 per cent. The turnover volume in Shanghai and Shenzhen stood at 453 billion yuan (US$66 billion).

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 2,954.13.

The projected upper bound is: 3,042.79.

The projected lower bound is: 2,764.19.

The projected closing price is: 2,903.49.

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 27 white candles and 23 black candles for a net of 4 white candles.

A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold (which appears to be the case with SSE COMPOSITE) to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.

A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend (which appears to be the case with SSE COMPOSITE) it is called a bullish hammer.

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).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 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 78.4387. 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 43.66. 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 14 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 9. This is not a topping or bottoming area. The last signal was a buy 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 3 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -8.891 at 2,905.805. Volume was 31% below average (neutral) and Bollinger Bands were 42% narrower than normal.

Open High Low Close Volume___
2,903.4252,907.8462,881.3802,905.80520,575,879,168

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

Moving Averages: 10-period 50-period 200-period
Close: 2,887.89 3,056.13 2,776.51
Volatility: 21 29 28
Volume: 20,764,829,696 30,663,497,728 21,297,262,592

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 4.7% above its 200-period moving average and is in an downward trend. Volatility is high 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 22 periods.

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