Shanghai: SSE Composite Index (.SSEC) China’s producer price index contracted

Shanghai: SSE Composite Index (.SSEC) China’s producer price index contracted

Shanghai: SSE Composite Index (.SSEC) China’s producer price index contracted

China’s producer price index contracted again in August, data from the National Bureau of Statistics (NBS) showed on Tuesday.

The producer price index (PPI) dropped 0.8% in August from a year earlier. Meanwhile, the consumer price index (CPI) rose 2.8% during the month year-on-year, unchanged in July.

Both figures were slightly better than analysts had expected – the PPI was expected to decline by 0.9% while the CPI was estimated to rise by 2.7%.

Chinese stocks traded lower and underperformed their regional peers following the release of the data. The Shanghai Composite and the Shenzhen Component were down 0.4% and 0.8% respectively.

Technical Indicators

Overall, the bias in prices is: Upwards.

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

The projected upper bound is: 3,096.46.

The projected lower bound is: 2,945.04.

The projected closing price is: 3,020.75.

Candlesticks

A black body occurred (because prices closed lower 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.

An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with SSE COMPOSITE). It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.

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 93.0520. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 11 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 71.17. This is where it usually tops. 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 23 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 129.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 9 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 17 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -3.536 at 3,021.202. Volume was 26% above average (neutral) and Bollinger Bands were 2% wider than normal.

Open     High      Low     Close     Volume___
3,027.4103,027.4103,005.3833,021.20224,001,294,336
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 2,951.40 2,903.80 2,857.49
Volatility: 10 17 24
Volume: 21,786,103,808 17,141,150,720 22,854,367,232

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 5.7% above 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 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 12 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an overbought condition.

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