Shanghai: SSE Composite Index (.SSEC) economic weaknesses dampen investor appetite
China stocks shed early gains to end lower on Monday as investors weighed the confluence of risks in the upcoming U.S.-China trade talks, Chinese economy and global oil prices. Financials were the outliers, anchoring the market and steadying the major indices.
At close, the Shanghai Composite index was down 0.1 percent at 2,575.81. The blue-chip CSI300 index was also down 0.1 percent. Both indices had traded higher in the morning session, but ended weaker for a third consecutive day.
Risks of trade war escalation continued to weigh on the market. China’s main goal at the G20 meeting is to get the United States to refrain from raising the tariffs in January, Chinese economists and academics say. However, President Xi will not be bullied into making a bad deal.
It was not all bad news. On Monday, China’s supervisor of state assets announced the launch of 10 billion yuan fund to help ease pressure on cash-strapped private companies in Shanghai. The fund invest in firms with good prospects and technological strength.
China’s economic growth is expected to hit 6.6 percent this year and slow to 6.3 percent in 2019 as the country struggles with challenges relating to trade and structural reform, economists from Beijing’s Renmin University said in a report.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 2,703.96.
The projected lower bound is: 2,442.60.
The projected closing price is: 2,573.28.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 11.2238. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 41.61. 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 26 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 -180.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 -3.673 at 2,575.810. Volume was 7% below average (neutral) and Bollinger Bands were 32% narrower than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,643.60 2,651.08 2,939.09
Volatility: 23 31 25
Volume: 20,430,280,704 15,705,449,472 14,885,462,016
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 12.4% below 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 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 7 periods.