Shanghai: SSE Composite Index (.SSEC) Chinese equities aren’t hanging around to see how the latest round of trade talks plays out

Shanghai: SSE Composite Index (.SSEC) Chinese equities aren’t hanging around to see how the latest round of trade talks plays out

Shanghai: SSE Composite Index (.SSEC) Chinese equities aren’t hanging around to see how the latest round of trade talks plays out

Foreign investors in Chinese equities aren’t hanging around to see how the latest round of trade talks plays out.

They’ve net sold an average 4.4 billion yuan ($646 million) of mainland shares a day through trading links with Hong Kong this week, according to data compiled by Bloomberg, on track for the heaviest week of selling since the Shenzhen connect opened in late 2016. The pullout extends a trend from April, which saw net sales of 18 billion yuan, a monthly record.

Trade concerns are weighing on markets again, with the U.S. poised to raise tariffs on $200 billion of Chinese goods to 25% from 10% on Friday. President Donald Trump said at a rally in Florida that Chinese leaders “broke the deal” the two sides were negotiating, though he also said “it will all work out.” China, which is sending a delegation to Washington for more talks, warned it would retaliate if the U.S. increased levies.

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 3,012.62.

The projected lower bound is: 2,691.16.

The projected closing price is: 2,851.89.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 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 11.2445. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 10 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 27.75. This is where it usually bottoms. 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 2 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 -130.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 18 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 sell 16 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -42.803 at 2,850.954. Volume was 30% below average (neutral) and Bollinger Bands were 83% wider than normal.

Open High Low Close Volume___
2,871.1972,888.8602,845.0372,850.95420,004,112,384

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

Moving Averages: 10-period 50-period 200-period
Close: 3,032.88 3,089.70 2,772.10
Volatility: 34 34 27
Volume: 27,362,295,808 38,220,566,528 20,739,309,568

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 2.8% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of .SSEC (mildly bearish). Our trend forecasting oscillators are currently bearish on .SSEC and have had this outlook for the last 7 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an oversold condition.

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