Shanghai: SSE Composite Index (.SSEC) China and Hong Kong stocks retreat before Washington and Beijing prepare to sign trade deal
China and Hong Kong stocks retreated on Wednesday, with benchmarks falling for a second day, as investors stepped back ahead of the signing of an interim trade deal between US and China in Washington.
The Shanghai Composite Index fell 0.5 per cent to 3,090.04 for the biggest loss in a week. The Hang Seng Index shed 0.4 per cent to 28,773.59.
While China’s delegates led by Vice-Premier Liu He are in Washington to sign the phase one trade agreement later on Wednesday, traders were put on edge by media reports that some of the current US tariffs will remain in place until after the presidential election and the Trump administration plans to come up with a new edict to curb exports to Huawei Technologies.
“While both sides US and China have compartmentalised these issues away from the trade, it still points to further frictions,” said Stephen Innes, a strategist at AxiTrader.
Shenzhen Sunyes Electronic Manufacturing Holding led some of the Chinese suppliers of Huawei lower. The company, which derives 42 per cent of its sales from the telecom equipment behemoth, dropped 1.6 per cent to 7.49 yuan. Shennan Circuits slipped 1 per cent to 170.24 yuan and Tianma Microelectronics lost 1.1 per cent to 16.83 yuan. Huawei contributes at least 17 per cent of the revenues to the two companies, according to Bloomberg data.
The US Commerce Department was drafting a rule that would block exports to Huawei, if American components make up more than 10 per cent of products’ values, the Reuters reported. The rule would be issued in weeks without a chance for public comment, it said.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 3,002.54.
The projected upper bound is: 3,153.30.
The projected lower bound is: 3,030.71
The projected closing price is: 3,092.01.
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 28 white candles and 22 black candles for a net of 6 white candles.
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 67.3892. This is not an overbought or oversold reading. The last signal was a sell 1 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 62.58. 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 sell 1 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 50. This is not a topping or bottoming area. The last signal was a sell 5 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 27 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -16.782 at 3,090.038. Volume was 13% above average (neutral) and Bollinger Bands were 24% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 3,092.37 2,971.26 2,967.03
Volatility: 13 13 20
Volume: 25,377,843,200 18,406,787,072 20,470,274,048
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 4.1% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into .SSEC (mildly bullish). Our trend forecasting oscillators are currently bullish on .SSEC and have had this outlook for the last 23 periods.