Shanghai: SSE Composite Index (.SSEC) external stock markets will restrict the rebound

Shanghai: SSE Composite Index (.SSEC) external stock markets will restrict the rebound

Shanghai: SSE Composite Index (.SSEC) external stock markets will restrict the rebound

Chinese stock markets will probably be led by fluctuations after the National Day holidays, mainly pressured by external market decline, a stock analyst predicted on Sunday.

But he said the central bank’s recent decision to cut reserve requirement ratios (RRR), would help stabilize the two bourses.

The Shanghai Composite Index stood at 2,821.35 points, up by 1.06 percent, on September 28, the last trading day before the National Day, while the Shenzhen Component Index reached 8,401 points on that day, up by 0.8 percent.

Li Daxiao, chief economist at Shenzhen-based Yingda Securities, told the Global Times on Sunday that the plunge in external stock markets would restrict the rebounding level of mainland stock markets after the weeklong National Day holidays.

The US stock markets fell during China’s National Day holidays, with the Dow Jones Industrial Average losing about 180 points on Friday, or 0.68 percent, after edging down by 0.75 percent on Thursday, while NASDAQ-listed shares plunged by 3.21 percent at the close on Friday.

The People’s Bank of China, China’s central bank, announced on Sunday that it would cut RRR by one percentage point for major commercial banks, joint-stock commercial banks, city commercial banks, non-county rural commercial banks as well as overseas-invested banks starting from October 15.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 2,918.96.

The projected lower bound is: 2,725.69.

The projected closing price is: 2,822.33.

Candlesticks

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 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 82.1061. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 61.80. 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 58 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 115.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 7 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 buy 7 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 29.575 at 2,821.350. Volume was 6% above average (neutral) and Bollinger Bands were 10% narrower than normal.

Open High Low Close Volume___
2,794.2642,821.7552,791.8362,821.35013,429,045,248

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

Moving Averages: 10-period 50-period 200-period
Close: 2,749.20 2,758.91 3,074.68
Volatility: 21 22 21
Volume: 12,248,053,760 12,543,600,640 15,003,001,856

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 8.2% below its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 5 periods.

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