Shanghai: SSE Composite Index (.SSEC) retreats from 7-week high

Shanghai: SSE Composite Index (.SSEC) retreats from 7-week high

Shanghai: SSE Composite Index (.SSEC) retreats from 7-week high

The Shanghai Composite Index surged 4.3pc last week, posting its best performance for the five-day period in two years

Investors may find buying into the ongoing rebound of Chinese stocks a tricky game.

As many of them, taken by surprise of the sudden rally, lament that they have not jumped onto the bandwagon quick enough, the strategist from the investment banking unit of Bank of Communications who correctly predicted a crash on Chinese equities in 2015, has warned the rebound could be short-lived.

The buying began gathering pace last week after the Shanghai Composite Index, the worst performer among the world’s major benchmarks, touched a four-year low. For the week, the gauge jumped 4.3 per cent for the biggest gain for the five-day period since March 2016, with turnovers also climbing to decent levels.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 2,876.04.

The projected lower bound is: 2,684.92.

The projected closing price is: 2,780.48.

Candlesticks

A white body occurred (because prices closed higher 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 23 white candles and 27 black candles for a net of 4 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 91.8702. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 7 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 57.84. 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 55 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 169.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 4 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 4 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -16.346 at 2,781.138. Volume was 13% below average (neutral) and Bollinger Bands were 25% narrower than normal.

Open High Low Close Volume___
2,775.0662,790.0322,771.1592,781.13811,198,317,568

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

Moving Averages: 10-period 50-period 200-period
Close: 2,707.96 2,757.67 3,082.12
Volatility: 21 22 21
Volume: 11,241,773,056 12,429,602,816 15,058,041,856

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 9.8% below its 200-period moving average and is in an upward trend. Volatility is 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 2 periods.

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