Shanghai: SSE Composite Index (.SSEC) rebounding from its three-month lows

Shanghai: SSE Composite Index (.SSEC) rebounding from its three-month lows

Shanghai: SSE Composite Index (.SSEC) rebounding from its three-month lows

At the close, the Shanghai Composite index was up 1.4% at 2,892.38, while the blue-chip CSI300 index gained 1.2%. Both indexes bounced from their lowest since January 22, hit earlier in the session.

CSI300’s sub-indexes for the financial sector, the consumer staples sector, and healthcare shares were all higher by almost 1%, while real estate stocks climbed 0.9%.

Data on Monday showed profits for China’s industrial firms dropping in April on slowing demand and manufacturing activity, suggesting the previous month’s rebound may have been a one-off and added pressure for policymakers to step up support for a cooling economy.

Premier Li Keqiang said on Friday China aimed to keep value-added taxes for the manufacturing industry at low levels and encourage companies to innovate, a move that Li said will ultimately help create jobs and maintain sustainable economic growth.

China’s financial regulators said on Friday the country’s banking and insurance regulator will take control of Inner Mongolia-based Baoshang Bank due to the serious credit risks it poses, in a rare takeover of a domestic lender. Regional banks’ shares fell and their funding costs rose on Monday.

Policymakers will unlikely let the Shanghai Composite slip below the key level of 2,800, as such a fall could trigger credit risks from pledged-share financing, Citic Securities’ analysts wrote in a note on Monday.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 2,955.59.

The projected upper bound is: 3,030.04.

The projected lower bound is: 2,747.99.

The projected closing price is: 2,889.02.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 25 white candles and 25 black 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 30.8242. This is not an overbought or oversold reading. The last signal was a sell 6 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 41.86. 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 11 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 -56. This is not a topping or bottoming area. The last signal was a buy 0 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 0 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 39.383 at 2,892.378. Volume was 34% below average (neutral) and Bollinger Bands were 2% narrower than normal.

Open High Low Close Volume___
2,851.2812,898.1292,833.0362,892.37819,672,090,624

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

Moving Averages: 10-period 50-period 200-period
Close: 2,892.65 3,062.31 2,775.95
Volatility: 24 30 28
Volume: 21,357,056,000 31,742,566,400 21,191,725,056

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 4.2% 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 out of .SSEC (mildly bearish). Our trend forecasting oscillators are currently bearish on .SSEC and have had this outlook for the last 19 periods.

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