Shanghai: SSE Composite Index (.SSEC) crucial week in the future of the trade war between Beijing and Washington

Shanghai: SSE Composite Index (.SSEC) crucial week in the future of the trade war between Beijing and Washington

Shanghai: SSE Composite Index (.SSEC) crucial week in the future of the trade war between Beijing and Washington

Chinese stocks slumped into the weekend Friday, ahead of a crucial week in the future of the trade war between Beijing and Washington.

The Shanghai Composite, China’s benchmark share index, dropped just shy of 2.5% of its value on the day, driven by investor jitters about the trade war ahead of next week’s G20 meeting in Buenos Aires, Argentina.

During that event, President Donald Trump and Chinese President Xi Jinping are set to hold a bilateral meeting to discuss trade between the two countries.

Investors are worried that the meeting will be fruitless and allow the continued imposition of tariffs on more than $US300 billion of goods flowing between the two countries.

In China, hundreds of companies use their shares as collateral for loans, but when share prices fall they are forced to sell to maintain balance in brokerage accounts, used to lend the companies money. This exacerbates market falls and has been blamed by some commentators for the major slump this year.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 2,708.04.

The projected lower bound is: 2,446.44.

The projected closing price is: 2,577.24.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
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 25 white candles and 25 black 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 21.3416. This is not an overbought or oversold reading. The last signal was a sell 3 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 42.01. 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 25 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 -167.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 3 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 0 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -65.951 at 2,579.483. Volume was 33% above average (neutral) and Bollinger Bands were 26% narrower than normal.

Open High Low Close Volume___
2,640.6672,642.0362,577.3512,579.48319,147,454,464

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

Moving Averages: 10-period 50-period 200-period
Close: 2,649.07 2,653.61 2,944.00
Volatility: 25 31 25
Volume: 20,837,449,728 15,651,867,648 14,929,653,760

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 12.4% below its 200-period moving average and is in an upward trend. Volatility is low 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 6 periods.

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