Shanghai: SSE Composite Index (.SSEC) rose as investors returned from a week-long holiday

Shanghai: SSE Composite Index (.SSEC) rose as investors returned from a week-long holiday

Shanghai: SSE Composite Index (.SSEC) rose as investors returned from a week-long holiday

Asian stocks moved higher on Tuesday ahead of the latest round of US-China trade talks later this week.

Chinese stocks rose as investors returned from a week-long holiday. The Shanghai Composite Index (SHCOMP) added 0.7%.

Hong Kong’s Hang Seng Index (HSI) rose 0.4%.

Japan’s Nikkei 225 (N225) and South Korea’s Kospi (KOSPI) gained 1.1% and 0.7%, respectively.

China’s Commerce Ministry on Tuesday said Vice Premier Liu He, the country’s chief trade negotiator, will travel to Washington for the next round of trade discussions on Thursday and Friday.

Zhong Shan, the Commerce Minister, Yi Gang, the governor of China’s central bank, and Ning Jizhe, the deputy head of the National Development and Reform Commission, will also attend the talks.

The White House also mentioned in a release Monday that its lead negotiators — Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer — will welcome Liu and his delegation.

The two sides will discuss forced technology transfer, intellectual property rights and agriculture, among other issues.

A decision by the United States to put 28 Chinese entities on a blacklist may cast a shadow over the talks, though.

The US Department of Commerce on Monday attributed that decision to what it called “human rights violations and abuses” of Uyghurs and other predominately Muslim ethnic minorities in China’s far western region of Xinjiang.

A 2018 report from the US State Department estimated that China had “arbitrarily detained 800,000 to possibly more than two million Uyghurs, ethnic Kazakhs, and other Muslims in internment camps designed to erase religious and ethnic identities.”

Surveillance company Hikvision and its rival, Dahua Technology, were on the list. They both said Tuesday that they were aware of the US’ decision and would suspend trading of their shares. Hikvision and Dahua trade in Shenzhen.

IFlytek, a voice recognition software developer which also trades in Shenzhen, dropped 2% after it was also put on the list. The company said Tuesday that being blacklisted would not have “any big impact” on its operations.

“The move may fuel more tension between the two sides,” wrote economists at ING in a research note. “Although investors remain hopeful for at least some headway on trade.”

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 2,985.72.

The projected lower bound is: 2,842.49.

The projected closing price is: 2,914.10.

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 30 white candles and 20 black candles for a net of 10 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

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 7.7803. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 42.68. 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 sell 10 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 -129.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 12 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 sell 8 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 8.381 at 2,913.570. Volume was 31% below average (neutral) and Bollinger Bands were 20% narrower than normal.

Open     High      Low     Close     Volume___
2,905.7562,933.0162,905.7562,913.57012,553,581,568
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 2,958.92 2,912.95 2,882.14
Volatility: 12 16 23
Volume: 15,774,889,984 17,507,756,032 22,907,648,000

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 1.1% above 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 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 26 periods.

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