Shanghai: SSE Composite Index (.SSEC) – COVID-19: Global markets fall into bear territory
Markets fell sharply this week, as the rapid spread of the COVID-19 virus continues to weigh on business activities around the globe. U.S markets fell in excess of 16% this week, with the Dow Jones Industrial Average plunging 10%, its highest drop since 1987.
Fears of the economic impact of the outbreak wiped out $11.5 trillion in value from U.S. markets last week, as investors remain jittery over the contraction in global demand.
On Wednesday, the Italian government announced new restrictions on movements in country, closing all nonessential shops and services. The country has 12,462 cases with 827 deaths, making it the worst-hit nation outside China.
The lockdown imposed by the government bans public gatherings and restricts travel to only urgent work situations, emergencies and health reasons. As part of its efforts to cushion its economy from the outbreak, the Italian government announced a $28.3 billion stimulus package, this after the finance minister highlighted that there will be a negative impact to GDP due to the outbreak.
Finally, at the close of trade on Wednesday, US President Donald Trump announced that the US would temporarily suspend most travel from the EU, and that the restrictions which began on Friday, will last for 30 days.
However, these restrictions would not apply to US citizens or travelers from the UK. At the close of trading on Friday, the FTSE-100, plunged 15.12% w/w, while the German DAX fell 16.92% w/w. In Asia the Nikkei fell 18.28%, with the Shanghai Composite contracting 6.00% w/w.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 3,036.18.
The projected lower bound is: 2,734.90.
The projected closing price is: 2,885.54.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 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 32.2201. This is not an overbought or oversold reading. The last signal was a sell 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 41.76. 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 27 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 -185.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 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 sell 1 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -36.059 at 2,887.427. Volume was 53% above average (neutral) and Bollinger Bands were 9% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,980.12 2,994.25 2,944.69
Volatility: 35 33 21
Volume: 37,728,243,712 30,156,568,576 20,560,805,888
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 1.9% below its 200-period moving average and is in an upward 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 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 6 periods.