Shanghai: SSE Composite Index (.SSEC) securities regulator said it will make it easier for companies to buy back shares

Shanghai: SSE Composite Index (.SSEC) securities regulator said it will make it easier for companies to buy back shares

Shanghai: SSE Composite Index (.SSEC) securities regulator said it will make it easier for companies to buy back shares

Stocks in China snapped a five-session losing streak to end higher on Monday, after the securities regulator said it will make it easier for companies to buy back shares. The news lifted smaller-cap stocks, which have been under pressure with pledged share financing as the equity market tanked in October.

The Shanghai Composite index closed 1.2 percent higher at 2,630.52. The blue-chip CSI300 index ended 1.2 percent firmer. The market closed lower for five straight sessions before trad ..

The tech and small-cap rally came after the China Securities Regulatory Commission said on Friday it will simplify the procedure for listed companies to initiative a share buyback.

“This mostly benefits small and private companies,” said Zhang Gang, an analyst at Central Securities in Shanghai. “There seem to be a signal that restraints on private companies are being relaxed, and that there is a real desire [from authorities] to resolve the pledged shares issues.”

The largest percentage gainers in the main Shanghai Composite index were Kingswood Enterprise Co Ltd and Shandong Jiangquan Industry Co Ltd and Time Publishing and Media Co Ltd , all up by 10.1 percent.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 2,756.76.

The projected lower bound is: 2,500.32.

The projected closing price is: 2,628.54.

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.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with SSE COMPOSITE), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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 22.6896. This is not an overbought or oversold reading. The last signal was a sell 2 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 49.44. 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 16 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 6. This is not a topping or bottoming area. The last signal was a sell 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 12 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 31.648 at 2,630.520. Volume was 29% above average (neutral) and Bollinger Bands were 22% narrower than normal.

Open High Low Close Volume___
2,593.2002,631.1702,590.2112,630.52017,503,131,648

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

Moving Averages: 10-period 50-period 200-period
Close: 2,628.47 2,669.58 2,981.75
Volatility: 22 31 25
Volume: 17,909,082,112 13,799,904,256 15,037,630,464

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 11.8% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 4 periods.

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