Shanghai: SSE Composite Index (.SSEC) investors prepared for tepid results from the ongoing earnings season

Shanghai: SSE Composite Index (.SSEC) investors prepared for tepid results from the ongoing earnings season

Shanghai: SSE Composite Index (.SSEC) investors prepared for tepid results from the ongoing earnings season

China stocks fell on Thursday as investors prepared for tepid results from the ongoing earnings season, as weak corporate earnings trends in the U.S. underscored the impact of the trade standoff between Beijing and Washington.

Shenzhen’s tech-heavy board ChiNext led the decline, falling nearly 2%, as the imminent debut of Shanghai’s competing Nasdaq-style board, the STAR Market, diverted attention and liquidity.

The blue-chip CSI300 index fell 1.0%, to 3,768.40, while the Shanghai Composite Index also dropped 1% to 2,901.18.

The largest percentage losers on the Shanghai index were Poten Environment Group Co Ltd down 8.39%, followed by Danhua Chemical Technology Co Ltd losing 8.08% and Zhuzhou Times New Material Technology Co Ltd down by 7.92%. 

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 2,954.10.

The projected upper bound is: 3,000.26.

The projected lower bound is: 2,802.39.

The projected closing price is: 2,901.32.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 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 falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. The two candles preceding the falling window were black, which makes this pattern even more bearish.

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 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 53.8734. This is not an overbought or oversold reading. The last signal was a buy 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 40.81. 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 48 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 -83. This is not a topping or bottoming area. The last signal was a buy 4 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 sell 8 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -30.516 at 2,901.177. Volume was 45% below average (neutral) and Bollinger Bands were 41% narrower than normal.

Open High Low Close Volume___
2,921.7392,921.7392,901.1772,901.17714,988,882,944

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

Moving Averages: 10-period     50-period     200-period
Close: 2,934.89 2,925.12 2,812.10
Volatility: 16 22 27
Volume: 15,293,537,280 20,058,892,288 22,616,336,384

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 down today (bearish) 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 3.2% above its 200-period moving average and is in an downward 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 bearish on .SSEC and have had this outlook for the last 2 periods.

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