Shanghai: SSE Composite Index (.SSEC) longest stretch of 1%-plus swings since 2015

Shanghai: SSE Composite Index (.SSEC) longest stretch of 1%-plus swings since 2015

Shanghai: SSE Composite Index (.SSEC) longest stretch of 1%-plus swings since 2015

Chinese shares rallied on Thursday with the tech sector leading the gains, while healthcare stocks recovered some of the lost ground seen in previous days.

The benchmark Shanghai Composite Index closed 1.83 percent higher at 2,794.38, while the Shenzhen Component Index closed 2.98 percent higher at 8,752.2.

Combined turnover at the two bourses stood at 347.1 billion yuan (about 50.8 billion U.S. dollars), up from 305.4 billion yuan the previous trading day.

Technology shares were among the biggest winners, with software and chip makers rising across the board.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 2,902.58.

The projected lower bound is: 2,676.30.

The projected closing price is: 2,789.44.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 21 white candles and 29 black candles for a net of 8 black candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with SSE COMPOSITE). It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend, it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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 55.0617. This is not an overbought or oversold reading. The last signal was a buy 1 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 46.42. 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 23 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 -55. This is not a topping or bottoming area. The last signal was a buy 2 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 4 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 50.312 at 2,794.382. Volume was 9% above average (neutral) and Bollinger Bands were 4% narrower than normal.

Open High Low Close Volume___
2,729.5792,801.6592,726.2152,794.38215,166,032,896

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

Moving Averages: 10-period 50-period 200-period
Close: 2,797.50 2,881.52 3,188.17
Volatility: 28 25 20
Volume: 14,463,366,144 13,685,863,424 16,045,284,352

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 12.4% below its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 12 periods.

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