Shanghai: SSE Composite Index (.SSEC) coming back from a dismal 2018
China stocks are coming back from a dismal 2018, during which the biggest ETFs tracking Chinese equities lost between 11% and 36%.
Worries about the country’s economy, as well as the U.S.-China trade war, were among chief reasons for the declines. But some of those concerns have faded as China delivered bullish data for March, and the two countries appear close to striking a trade deal.
On April 1, China’s official manufacturing purchasing managers index for March climbed to 50.8 from 49.9. That marked the first increase in four months, sparking a 2.6% jump in both the Shanghai Composite and the Shanghai Shenzhen CSI 300, which tracks China A-share stocks. The Shanghai Composite hit a 10-month high and the CSI 300, a one-year high.
While China ETFs began recovering at the start of this year, the positive data has given the funds an extra boost. All but one of the funds in the accompanying chart have beaten the broader market. This year through Wednesday, they yielded gains between 15.3% and 42.5%, according to Morningstar Direct. The S&P 500 was up 15.2%.
While these ETFs are recovering, they are not yet in buy areas. Investors could put them on a watch list to see if they set up potential buy opportunities. The first three ETFs below are still well off their June 2015 peaks.
Xtrackers Harvest CSI 500 China A-Shares Small Cap (ASHS) takes the lead with a 42.5% year-to-date gain. The $85.6 million fund tracks the China Securities 500 Index (CSI 500 Index). Launched in May 2014, ASHS offers U.S. investors direct access to small-cap China A-share stocks.
Industrials accounted for the biggest sector weight as of April 3 at just over 20% of assets. Information technology was next at about 18%, materials 16%, consumer discretionary 13% and health care 10%. Smaller positions in consumer staples, real estate, financials, utilities and energy made up the rest.
ASHS is 9% off its 52-week high as it builds the right side of a long, steep cup-shaped base that dates back to September 2017.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 3,393.19.
The projected lower bound is: 3,127.43.
The projected closing price is: 3,260.31.
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 34 white candles and 16 black candles for a net of 18 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 96.0737. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 4 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 71.12. 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 sell 19 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 172.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.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 1 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 30.276 at 3,246.571. Volume was 91% above average (neutral) and Bollinger Bands were 23% 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: 3,106.27 2,888.54 2,744.95
Volatility: 30 29 27
Volume: 38,660,648,960 32,911,112,192 18,788,777,984
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 18.3% above its 200-period moving average and is in an upward 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 bullish on .SSEC and have had this outlook for the last 52 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an overbought condition.
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