Shanghai: SSE Composite Index (.SSEC) shares edge lower on profit-taking

Shanghai: SSE Composite Index (.SSEC) shares edge lower on profit-taking

Shanghai: SSE Composite Index (.SSEC) shares edge lower on profit-taking

China’s main stock indexes ended lower on Tuesday, pulling back from near 6-1/2-month highs in the previous session, on profit taking, but losses were limited by hopes for continued government support for the economy and a dovish U.S. Fed.

The Shanghai Composite index fell 0.18 percent to 3,090.98.

The blue-chip CSI300 index was down 0.46 percent, with its financial sector sub-index lower by 0.54 percent.

China’s housing ministry said it would slash the time needed to obtain approvals for housing projects, in line with China’s intent to speed up infrastructure spending this year and have a construction boom as part of its efforts to lift domestic demand and economic growth, which has slowed.

Investors are also looking to the policy meeting of the U.S. Federal Reserve this week for signs of dovishness, including whether policymakers have lowered their interest rate forecasts to more closely align their “dot plot”, a diagram showing individual policymakers’ rate views for the next three years.

In contrast to broader market declines, nuclear power-related stocks surged after environmental impact assessments (EIA) for two nuclear power plant projects were submitted for approval to regulators on Monday, a vital stage in the resumption of China’s atomic energy programme after a three-year halt in new approvals.

State-owned China National Nuclear Power jumped as much as 10 percent to its highest since April 2018, before trimming gains. It closed up 2.94 percent.

The largest percentage losers in the Shanghai index were Huayi Electric Co Ltd, down 8.15 percent, followed by Eastern Communications Co Ltd that lost 7.83 percent and Zhonglu Co Ltd which fell 5.91 percent.

So far this year, the Shanghai stock index is up 23.9 percent and the CSI300 has risen 27.3 percent, while China’s H-share index listed in Hong Kong is up 15.1 percent. Shanghai stocks have risen 5.1 percent this month.

Overall, the bias in prices is: Upwards.

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

By the way, prices are vulnerable to a correction towards 2,821.15.

The projected upper bound is: 3,223.75.

The projected lower bound is: 2,982.08.

The projected closing price is: 3,102.92.

Candlesticks

A black body occurred (because prices closed lower 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 33 white candles and 17 black candles for a net of 16 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 76.5932. This is not an overbought or oversold reading. The last signal was a sell 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 66.80. 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 7 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 109.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 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 4 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -5.442 at 3,090.975. Volume was 59% above average (neutral) and Bollinger Bands were 74% wider than normal.

Open High Low Close Volume___
3,099.8973,113.4333,076.3633,090.97535,090,886,656

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

Moving Averages: 10-period 50-period 200-period
Close: 3,049.25 2,750.92 2,744.98
Volatility: 37 27 26
Volume: 45,703,335,936 27,346,722,816 17,248,657,408

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 12.6% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into .SSEC (mildly bullish). Our trend forecasting oscillators are currently bullish on .SSEC and have had this outlook for the last 40 periods.

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