Shanghai: SSE Composite Index (.SSEC) stocks end higher on dovish Fed stance
Shanghai stocks edged higher on Thursday, after the U.S. Federal Reserve took a more accommodative stance at its policy meeting.
The blue-chip CSI300 index was unchanged at 3,836.89 points, while the Shanghai Composite Index closed up 0.3 percent at 3,101.46 points.
In comments at the end of a two-day policy meeting on Wednesday, the Fed abandoned projections for any interest rate hikes this year amid signs of an economic slowdown, and said it would halt the steady decline of its balance sheet in September.
Meanwhile, there are concerns about valuations as major Chinese stock indexes trade near nine-month highs, amid lingering concerns about trade talks with the United States.
U.S. President Donald Trump on Wednesday warned that Washington may leave tariffs on Chinese goods for a “substantial period” to ensure Beijing’s compliance with any trade deal.
China-U.S. trade talks are set to resume next week.
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 2,831.97.
The projected upper bound is: 3,233.77.
The projected lower bound is: 2,994.63.
The projected closing price is: 3,114.20.
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 34 white candles and 16 black candles for a net of 18 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 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 83.4105. 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 67.53. 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 9 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 106.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 1 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 sell 6 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 10.815 at 3,101.455. Volume was 84% above average (neutral) and Bollinger Bands were 24% wider 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: 3,047.60 2,776.17 2,744.46
Volatility: 36 26 26
Volume: 42,043,191,296 28,423,680,000 17,508,714,496
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 13.0% 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 42 periods.