Shanghai: SSE Composite Index (.SSEC) markets bounce back

Shanghai: SSE Composite Index (.SSEC) markets bounce back

Shanghai: SSE Composite Index (.SSEC) markets bounce back

Hong Kong stocks ended the morning session higher on Wednesday on hopes for a limited economic fallout from the new coronavirus, which has killed more than 2,000 people.

The Hang Seng Index rose 0.4 percent, to 27,651 by the break.

On the mainland, the Shanghai Composite Index gained 0.3 percent, to 2,994 while the Shenzhen Composite Index rose 0.5 percent, to 1,865.

Falls on US and European markets overnight – after Apple’s warning that it would miss its quarterly revenue forecast due to the epidemic – did not carry over to Asia.

After four straight sessions in the red, Tokyo’s benchmark Nikkei 225 index rallied 0.7 percent, but lingering concerns over the economic toll from the virus capped gains.

Elsewhere, South Korea slipped 0.1 percent as the number of confirmed cases of the virus jumped by nearly half. Sydney rose 0.1 percent and Taipei was 0.9 percent higher.

“Ultimately, it’s not Apple earnings reports rather the [People’s Bank of China] stimulus efforts that will drive the manufacturing rebound in China and fortify the supply chain dynamics which should underpin oil markets,” said Stephen Innes of AxiCorp.

“Don’t think the PBOC is going to sit in idle and watch the GDP guesstimates trickle lower, it might be time to get on board or risk getting left at the gas station,” he said.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 3,103.19.

The projected lower bound is: 2,851.60.

The projected closing price is: 2,977.39.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 33 white candles and 17 black candles for a net of 16 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

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 90.4403. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 10 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 52.17. 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 10 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 97. This is not a topping or bottoming area. The last signal was a buy 9 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 3 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -9.570 at 2,975.402. Volume was 62% above average (neutral) and Bollinger Bands were 122% wider than normal.

Open     High      Low     Close     Volume___
2,979.5222,998.2722,971.8222,975.40231,514,116,096
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 2,922.86 2,982.49 2,944.33
Volatility: 16 28 22
Volume: 29,041,639,424 23,332,454,400 19,499,622,400

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 1.1% above its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into .SSEC (mildly bullish). Our trend forecasting oscillators are currently bearish on .SSEC and have had this outlook for the last 12 periods.

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