Shanghai: SSE Composite Index (.SSEC) stocks climb as factory activity rebounds, spurs hopes of recovery

Shanghai: SSE Composite Index (.SSEC) stocks climb as factory activity rebounds, spurs hopes of recovery

Shanghai: SSE Composite Index (.SSEC) stocks climb as factory activity rebounds, spurs hopes of recovery

China shares climbed on Tuesday after the country reported a better-than-expected industrial activity, spurring hopes that the world’s second-largest economy is starting to recover from the shock of the coronavirus pandemic.

At the midday break, the Shanghai Composite index was up 0.4% at 2,758.81 points. The blue-chip CSI300 index was up 0.6%.

As of midday, the Shanghai benchmark was down 4.2% month-on-month, while CSI300 was lower by 6.2% over the month. Both benchmarks are on course for their worst month since May 2019.

CSI300’s financial sector sub-index inched up 0.1%, the consumer staples sector gained almost 3%, the real estate index dropped 1.2%, while the healthcare sub-index ticked up 0.4%. Chinese H-shares listed in Hong Kong gained 1.1%, while the Hang Seng Index also rose 1.1% to 23,428.15.

The smaller Shenzhen index and the start-up board ChiNext Composite index each added 0.8%. Factory activity in China unexpectedly expanded in March from a collapse the month before, but analysts caution that a durable near-term recovery is far from assured as the global coronavirus crisis knocks foreign demand and threatens a steep economic slump.

The pandemic is expected to sharply slow growth in developing economies in East Asia and the Pacific as well as China, the World Bank said in an economic update on Monday.

The Shanghai stock index is below its 50-day moving average and 200-day moving average.

Technical Indicators

Overall, the bias in prices is: Downwards.

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

By the way, prices are vulnerable to a correction towards 2,890.53.

The projected upper bound is: 2,906.04.

The projected lower bound is: 2,579.94.

The projected closing price is: 2,742.99.

Candlesticks

A black body occurred (because prices closed lower 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 28 white candles and 22 black candles for a net of 6 white 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 60.2843. This is not an overbought or oversold reading. The last signal was a sell 1 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 40.99. 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 39 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 -21. This is not a topping or bottoming area. The last signal was a buy 5 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 1 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 3.082 at 2,750.296. Volume was 14% below average (neutral) and Bollinger Bands were 93% wider than normal.

Open     High      Low     Close     Volume___
2,767.3072,771.1682,743.1152,750.29621,859,866,624
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 2,737.53 2,916.55 2,936.22
Volatility: 32 36 23
Volume: 25,586,221,056 30,588,796,928 20,978,178,048

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 6.3% below its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on .SSEC and have had this outlook for the last 11 periods.

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