Shanghai: SSE Composite Index (.SSEC) investors seeking more clarity in the U.S.-China trade negotiations
Chinese shares closed weaker on Monday, retreating from gains hit in the previous week, on profit-taking and as investors seek more clarity in the U.S.-China trade negotiations, but hopes that Beijing’s policy will bolster growth curbed losses.
At the close, the Shanghai Composite index was down 0.05 percent at 3,244.81. The index gained more than 5 percent last week.
The blue-chip CSI300 index ended down 0.12 percent, with its financial sector sub-index lower by 0.15 percent, the consumer staples sector up 0.86 percent, the real estate index down 0.69 percent and the healthcare sub-index closed 1.23 percent weaker.
The smaller Shenzhen index ended down 0.55 percent and the start-up board ChiNext Composite index closed 2.116 percent weaker.
The office of the U.S. Trade Representative said “significant work remains” in trade talks with China ahead of new discussions scheduled to resume this week.
Adding to profit-taking pressure, foreign investors were net sellers of A-shares on Monday, with Refinitiv data showing net outflows through the Northbound legs of the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect schemes.
In an effort to support the economy, China will step up its policy of targeted cuts to banks’ required reserve ratios to encourage financing for small and medium-sized businesses that play a key role in economic growth.
“Looking at the market environment this week, macro-economic data is showing signs of improvement at the margins, policy is turning more positive, and cuts to taxes and fees are continuing to strengthen,” Shayne ‘Jack’ Heffernan said in a note.
“Add to that the steady progress in U.S.-China trade talks and foreign inflows reigniting the popularity of China’s market, there is still some room for the index to expand its recovery,” Heffernan added.
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 2,891.26.
The projected upper bound is: 3,390.46.
The projected lower bound is: 3,125.11.
The projected closing price is: 3,257.79.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 33 white candles and 17 black candles for a net of 16 white candles.
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 91.7723. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 5 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 70.87. 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 20 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 sell 10 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 buy 2 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -1.761 at 3,244.810. Volume was 102% above average (neutral) and Bollinger Bands were 29% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 3,120.34 2,901.52 2,745.91
Volatility: 30 29 27
Volume: 40,057,348,096 33,538,615,296 18,986,756,096
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 18.2% 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 53 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an overbought condition.