Shanghai: SSE Composite Index (.SSEC) gauge may drop 10% if no deal reached at summit

Shanghai: SSE Composite Index (.SSEC) gauge may drop 10% if no deal reached at summit

Shanghai: SSE Composite Index (.SSEC) gauge may drop 10% if no deal reached at summit

Chinese equities got a boost Wednesday from news that U.S.-China trade talks are back on. So this is the start of a summer surge, right?

Not so fast, say market watchers. The Shanghai Composite Index could drop 10% in the near term if the countries fail to reach an agreement when presidents Xi Jinping and Donald Trump meet at the Group of 20 summit, according to Cliff Tan, head of East Asia research at MUFG Bank Ltd.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 3,036.33.

The projected lower bound is: 2,787.34.

The projected closing price is: 2,911.83.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend.

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 45.8086. 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 50.55. 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 139.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 6 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 16 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 27.645 at 2,917.803. Volume was 25% below average (neutral) and Bollinger Bands were 68% narrower than normal.

Open High Low Close Volume___
2,944.1152,953.3352,916.2152,917.80323,075,696,640

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

Moving Averages: 10-period 50-period 200-period
Close: 2,886.47 3,002.53 2,785.01
Volatility: 20 26 27
Volume: 19,868,137,472 25,999,476,736 21,722,036,224

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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
SSE COMPOSITE is currently 4.8% above 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 3 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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