Shanghai: SSE Composite Index (.SSEC) positive sentiment on the U.S.-China trade front
Major stock markets in Asia closed higher on Wednesday amid positive sentiment on the U.S.-China trade front.
The mainland Chinese markets were higher on the day. The Shenzhen component rose 2.012 percent to close at 8,171.21 and the Shenzhen composite gained 1.872 percent to finish its trading day at 1,389.68. The Shanghai composite recovered from earlier losses to close 1.84 percent higher at 2,721.07.
Trump may postpone trade deadline
U.S. President Donald Trump said Tuesday that he was open to postponing the March 2 deadline for tariffs if Washington and Beijing can reach a trade deal soon.
The March 2 deadline is crucial in the negotiations as U.S. tariffs on Chinese goods will increase if a deal is not struck before then. Treasury Secretary Steven Mnuchin, along with U.S. Trade Representative Robert Lighthizer, are in Beijing this week for another round of negotiations with Chinese Vice Premier Liu He.
A morning note from strategists at DBS Group Research sounded a warning “not to count the chickens before they hatch.”
“The pendulum on whether a US-China trade deal could be struck has been swinging with US President Donald Trump’s comments on his on/off meeting with China President Xi Jinping to extending talks beyond the 1st of March. The extension will only be possible if China accedes to US’s push for enforcement mechanisms on areas such as forced technology transfer and intellectual property protection,” they said.
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 2,613.72.
The projected upper bound is: 2,796.49.
The projected lower bound is: 2,651.46.
The projected closing price is: 2,723.97.
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 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
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 97.5062. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 11 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 73.71. 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 buy 76 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 245.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 22 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 49.175 at 2,721.068. Volume was 57% above average (neutral) and Bollinger Bands were 12% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,620.99 2,575.13 2,768.51
Volatility: 14 18 24
Volume: 16,055,863,296 14,483,321,856 14,125,934,592
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 1.7% below its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 bullish on .SSEC and have had this outlook for the last 16 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an overbought condition.