Shanghai: SSE Composite Index (.SSEC) investors booked profits following a surge in the previous session

Shanghai: SSE Composite Index (.SSEC) investors booked profits following a surge in the previous session

Shanghai: SSE Composite Index (.SSEC) investors booked profits following a surge in the previous session

Shanghai stocks ended flat after briefly touching a near five-month high on Tuesday, as investors booked profits following a surge in the previous session. 

The blue-chip CSI300 index fell 0.2 per cent, to 3,439.61 points, while the Shanghai Composite Index briefly hit its highest since Sept. 28 before ending flat at 2,755.65 points. 

Both indexes had leapt around 3 per cent on Monday, having gained more than 10 pct this year, thanks to trade optimism and as Beijing stepped up efforts to shore up the economic growth. 

Reports of progress in trade talks between the United States and China have prompted investors to be mildly optimistic that the two countries can reach a compromise by March 1 that will de-escalate their dispute or at least avoid a sharp hike in tariffs, although few details from the talks have emerged. 

A new round of talks between the United States and China to resolve their trade war will take place in Washington on Tuesday, with follow-up sessions at a higher level later in the week, the White House said on Monday.

China will provide further support for banks’ perpetual bond issuance, including examining ways to broaden the investor base for such bonds, to help boost lending in the economy, a vice central bank governor said on Tuesday.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 2,634.16.

The projected upper bound is: 2,836.43.

The projected lower bound is: 2,681.56.

The projected closing price is: 2,759.00.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white 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.

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 78.5140. This is not an overbought or oversold reading. The last signal was a sell 0 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 71.59. This is where it usually tops. 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 sell 2 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 133.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 10 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 26 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 1.289 at 2,755.646. Volume was 80% above average (neutral) and Bollinger Bands were 24% wider than normal.

Open High Low Close Volume___
2,759.4962,780.7842,737.5862,755.64628,804,626,432

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

Moving Averages: 10-period 50-period 200-period
Close: 2,673.73 2,586.74 2,761.33
Volatility: 22 19 24
Volume: 19,311,112,192 15,234,129,920 14,293,606,400

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 0.2% below its 200-period moving average and is in an upward 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 moderate flows of volume into .SSEC (mildly bullish). Our trend forecasting oscillators are currently bullish on .SSEC and have had this outlook for the last 20 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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