Shanghai: SSE Composite Index (.SSEC) shares extend rally
Chinese stocks closed higher on Friday, with the benchmark Shanghai Composite Index rising for the fifth day in a row.
The Shanghai Composite Index gained 0.46 percent to close at 2,999.6 points. The Shenzhen Component Index climbed 0.41 percent to 9,823.42 points.
The combined turnover of stocks in the two indices shrank to 634 billion yuan (about 89.5 billion U.S. dollars) from 797.5 billion yuan the previous trading day.
Gainers outnumbered losers by 794 to 576 on the Shanghai bourse and 1,206 to 824 in Shenzhen.
Auto makers staged strong gains, with Yangzhou Yaxing Motor Coach surging by the daily limit of 10 percent and Chongqing Changan Automobile going up 4.14 percent.
Companies in the 5G sector continued Thursday’s upward trend. Kyland Technology rose by the daily limit of 10 percent, while ZTE Corporation jumped 9.27 percent.
The ChiNext Index, China’s NASDAQ-style board of growth enterprises, gained 0.19 percent to close at 1,692.24 points Friday.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 3,080.02.
The projected lower bound is: 2,920.01.
The projected closing price is: 3,000.02.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.
A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend (which appears to be the case with SSE COMPOSITE) it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend it is called a bullish hammer.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
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.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 87.0602. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 69.36. 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 21 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 178.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.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 15 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 13.737 at 2,999.601. Volume was 13% above average (neutral) and Bollinger Bands were 10% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 2,923.38 2,904.66 2,854.00
Volatility: 15 18 24
Volume: 20,732,567,552 17,105,091,584 22,837,696,512
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.
SSE COMPOSITE is currently 5.1% above 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 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 10 periods.
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