Shanghai: SSE Composite Index (.SSEC) posting an eight-month closing high

Shanghai: SSE Composite Index (.SSEC) posting an eight-month closing high

Shanghai: SSE Composite Index (.SSEC) posting an eight-month closing high

China stocks extended gains into a third session on Tuesday, with the blue-chip index posting an eight-month closing high, boosted by an interim China-U.S. trade deal which helped temper a key external risk to its financial markets.

The blue-chip CSI300 index rose 1.4%, to 4,041.80, the highest close since April 19, while the Shanghai Composite Index rallied 1.3% to 3,022.42.

The “phase one” trade deal between Washington and Beijing has been “absolutely completed,” a top White House adviser said on Monday, adding that U.S. exports to China would double under the agreement.

The deal announced on Friday will reduce some U.S. tariffs on Chinese goods in exchange for increased Chinese purchases of U.S. agricultural, manufactured and energy products by some $200 billion over the next two years.

Sentiment was also aided by a host of recent data pointing to resilience in the world’s second-largest economy.

In a fresh sign that Beijing will continue to support the economy with fiscal stimulus, the state planner said on Tuesday it approved eight fixed-asset investment projects in November worth a combined 7.1 billion yuan.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.93%, while Japan’s Nikkei index was up 0.47%.

The yuan was quoted at 7.0016 per U.S. dollar, 0.1% weaker than the previous close of 6.9949.

So far this year, the Shanghai stock index is up 19.67%, while China’s H-share index is up 6.5%. Shanghai stocks have risen 3.91% this month.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 3,084.24.

The projected lower bound is: 2,964.96.

The projected closing price is: 3,024.60.

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 9 white candles and 1 black candles for a net of 8 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 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 92.9025. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 21 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 71.86. 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 60 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 218.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 3 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 7 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 38.029 at 3,022.422. Volume was 78% above average (neutral) and Bollinger Bands were 7% narrower than normal.

Open     High      Low     Close     Volume___
2,985.2623,039.3832,982.4963,022.42229,303,226,368
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 2,933.60 2,935.38 2,965.78
Volatility: 12 13 21
Volume: 17,679,310,848 15,150,145,536 22,535,061,504

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 1.9% 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 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 3 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an overbought condition.

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