Shanghai: SSE Composite Index (.SSEC) stocks fall as bank lending disappoints

Shanghai: SSE Composite Index (.SSEC) stocks fall as bank lending disappoints

Shanghai: SSE Composite Index (.SSEC) stocks fall as bank lending disappoints

Chinese shares fell on Tuesday after data showed banks extended fewer-than-expected new loans in July.

The Shanghai Composite index closed down 0.6% at 2,797.26, while the blue-chip CSI300 index ended 0.9% lower.

The smaller Shenzhen index ended down 0.7% and the start-up board ChiNext Composite index was weaker by 1%.

Chinese banks extended 1.06 trillion yuan ($150.06 billion) in new yuan loans in July, down from June and falling short of analysts’ expectations, according to data released by the People’s Bank of China on Monday.

Analysts expect Beijing to allow more easing to energise growth. “Investors we spoke to are not yet convinced that announced easing measures will raise consumption and investments,” UBS China strategist Wendy Liu said in a note on Tuesday. The Swiss bank toned down its China 2019 GDP growth forecast to 6.1% from 6.2% previously.

The Shanghai stock index is below its 50-day moving average and below its 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 2,904.07.

The projected upper bound is: 2,882.14.

The projected lower bound is: 2,708.66.

The projected closing price is: 2,795.40.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black 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 58.5180. This is not an overbought or oversold reading. The last signal was a buy 3 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 37.02. 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 3 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 -63. This is not a topping or bottoming area. The last signal was a buy 2 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 7 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -17.735 at 2,797.260. Volume was 42% below average (neutral) and Bollinger Bands were 2% narrower than normal.

Open     High      Low     Close     Volume___
2,798.0512,802.0422,790.6082,797.26013,091,650,560
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 2,825.84 2,915.69 2,829.31
Volatility: 18 19 25
Volume: 15,848,503,296 17,842,094,080 22,784,651,264

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 1.1% below its 200-period moving average and is in an downward trend. Volatility is 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 20 periods.

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