Shanghai: SSE Composite Index (.SSEC) post biggest monthly gain in nearly 4 years

Shanghai: SSE Composite Index (.SSEC) post biggest monthly gain in nearly 4 years

Shanghai: SSE Composite Index (.SSEC) post biggest monthly gain in nearly 4 years

Chinese shares ended lower on Thursday on concerns about Sino-U.S. trade and slowing growth, but the country’s main stock indexes posted their biggest monthly gains in nearly four years on investor hopes for government stimulus and policy support.

At the close, the Shanghai Composite index was down 0.44 percent at 2,940.95. The index ended February with a 13.8 percent rise, its biggest monthly gain since April 2015.

The blue-chip CSI300 index finished down 0.25 percent, but posted its biggest monthly gain since April 2015, rising 14.6 percent.

Factory activity in China contracted for the third straight month in February, and export orders fell to the lowest level since the global financial crisis, underscoring concerns over a slowdown in the world’s second-largest economy.

U.S. Trade Representative Robert Lighthizer on Wednesday cautioned that much work was still needed to nail down a U.S.-China trade agreement, including working out how it will be enforced, and that the United States would need to maintain the threat of tariffs on Chinese goods for years even if Washington and Beijing strike a deal to end a costly tariff war.

But highlighting official concern about supporting the country’s financial markets, a central bank official said on Thursday that China would strengthen real-time monitoring of its stock, bond and foreign exchange markets to guard against risks.

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 2,711.38.

The projected upper bound is: 3,044.96.

The projected lower bound is: 2,850.82.

The projected closing price is: 2,947.89.

Candlesticks

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 29 white candles and 21 black candles for a net of 8 white candles.

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 80.2524. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 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 77.81. 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 5 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 116.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 17 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 33 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -12.870 at 2,940.954. Volume was 95% above average (neutral) and Bollinger Bands were 140% wider than normal.

Open High Low Close Volume___
2,950.0552,965.3042,930.1952,940.95435,020,660,736

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 2,830.72 2,621.83 2,753.52
Volatility: 37 23 25
Volume: 35,099,901,952 18,774,812,672 15,202,525,184

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 6.8% 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 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 27 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an overbought condition.

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