Shanghai: SSE Composite Index (.SSEC) heavy selling in the energy sector
Chinese stocks fell sharply on Thursday as heavy selling in the energy sector and worries about the levels of borrowing in the stock market added to broader concerns over growth and the global sell-off in equities.
The Shanghai Composite index closed down 2.9 percent at 2,486.42, after hitting its lowest point since November 2014 on Thursday morning.
Energy stocks were led lower by falling energy prices. CSI’s sub-index tracking energy stocks was down 4.91 pct.
The CSI 300 financial sector sub-index was lower by 2.08 percent, the consumer staples sector down 2.17 percent , the real estate index off 1.82 percent and healthcare sub-index 3.89 percent lower.
The across-the-board decline came after a brief bounce-back on Wednesday.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 2,753.36.
The projected upper bound is: 2,599.51.
The projected lower bound is: 2,359.80.
The projected closing price is: 2,479.66.
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 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
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 11.3755. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 8 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 29.67. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 67 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 -117.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 8 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 5 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -75.195 at 2,486.419. Volume was 2% below average (neutral) and Bollinger Bands were 60% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,633.75 2,712.76 3,044.31
Volatility: 40 28 23
Volume: 13,746,596,864 12,121,205,760 15,062,581,248
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 18.3% below its 200-period moving average and is in an downward 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 bearish on .SSEC and have had this outlook for the last 4 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an oversold condition.