Shanghai: SSE Composite Index (.SSEC) stocks fall before MSCI’s announcement on weighting increases for Chinese stocks and release of July trade data
China’s stocks fell on Wednesday, with the benchmark gauge capping its longest run of declines in the past two months, as the US-China trade tension weighs on the growth outlook.
The Shanghai Composite Index dropped 0.3 per cent to 2,768.68, capping a sixth straight day of declines and matching a similar stretch that ended on June 6. Hong Kong’s Hang Seng Index rose 0.1 per cent to 25,997.03, snapping a five-day loss.
Mainland stocks traded sideways for most of the day before closing lower again, with companies linked to the Shanghai Free Trade Zone tumbling after plans were unveiled on Tuesday to expand the special enclave.
Traders were keeping a close watch on any progress over the trade spat between the world’s two largest economies that has escalated in recent days.
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 2,926.71.
The projected upper bound is: 2,849.43.
The projected lower bound is: 2,682.28.
The projected closing price is: 2,765.85.
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 24 white candles and 26 black candles for a net of 2 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with SSE COMPOSITE), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 14.3034. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 5 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 26.81. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 62 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 -165.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 5 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 3 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -8.876 at 2,768.679. Volume was 33% below average (neutral) and Bollinger Bands were 19% narrower than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,885.21 2,924.25 2,824.13
Volatility: 15 18 26
Volume: 15,859,266,560 18,353,358,848 22,765,584,384
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 2.0% below its 200-period moving average and is in an downward trend. Volatility is relatively normal 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 16 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an oversold condition.