Shanghai: SSE Composite Index (.SSEC) leads Asia markets rally
Shanghai surged more than 5% yesterday, leading a rally across Asian markets after Donald Trump said he would delay a hike in tariffs on Chinese goods, citing “substantial progress” in trade talks and fuelling hopes of an end to the long-running stand-off.
Optimism over the negotiations had already provided support to global equities, spurring a rally in January and February, but the president’s comments gave extra ammunition to investors to ramp up buying.
The news also fired currency markets with the yuan extending gains to a seven-month high, while other high-yielding, riskier units were also up against the dollar.
Trump said on Twitter that the US “has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues”. He added: “As a result of these very productive talks, I will be delaying the US increase in tariffs now scheduled for March 1.”
The president also said he planned to hold a summit with his Chinese counterpart Xi Jinping at his Mar-a-Lago estate in Florida to sign a deal. China’s Xinhua news agency added that the two sides had “made substantial progress on specific issues” including on transfer of technology, intellectual property and agriculture.
Shanghai closed up 5.6% and Hong Kong added 0.5% while Tokyo ended 0.5% higher.
Sydney put on 0.3%, while Seoul was 0.1% higher, Taipei added 0.7% and Jakarta rose 0.4%. There were also gains in Wellington, Bangkok, Mumbai and Singapore.
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 2,688.20.
The projected upper bound is: 3,080.97.
The projected lower bound is: 2,887.33.
The projected closing price is: 2,984.15.
A white body occurred (because prices closed higher 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 30 white candles and 20 black candles for a net of 10 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.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 96.6983. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 84.15. 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 3 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 205.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 15 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 31 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 15.450 at 2,976.734. Volume was 158% above average (trending) and Bollinger Bands were 122% 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: 2,788.84 2,608.21 2,755.18
Volatility: 35 23 25
Volume: 30,044,053,504 17,310,988,288 14,858,665,984
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 8.0% above 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 very strong flows of volume into .SSEC (bullish). Our trend forecasting oscillators are currently bullish on .SSEC and have had this outlook for the last 25 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an overbought condition.
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