Shanghai: SSE Composite Index (.SSEC) – Stocks tick up in Tokyo, Hong Kong, Shanghai

Shanghai: SSE Composite Index (.SSEC) – Stocks tick up in Tokyo, Hong Kong, Shanghai

Shanghai: SSE Composite Index (.SSEC) – Stocks tick up in Tokyo, Hong Kong, Shanghai

Asian shares rose Tuesday, echoing the rally on Wall Street, amid a few glimmers of hope that the coronavirus pandemic could be slowing.

Japan’s benchmark Nikkei 225 JP:NIK gained 0.9% while South Korea’s Kospi KR:180721 gained 0.2%. Hong Kong’s Hang Seng HK:HSI added 0.4%, while the Shanghai Composite CN:SHCOMP jumped 1.7%.

Australia’s S&P/ASX 200 AU:XJO edged 1% lower. Shares rose in Taiwan TW:Y9999 and most of Southeast Asia, but fell 0.9% in Indonesia ID:JAKIDX .

China on Tuesday reported no new deaths from the coronarivus over the past 24 hours and had 32 new cases, all from people who returned from overseas. The country that gave rise to the global pandemic has recorded 3,331 deaths and 81,740 total cases. Numbers of daily new deaths have been hovering in the single digits for weeks, hitting just one on several occasions.

The number of new coronavirus cases is dropping in the European hotspots of Italy and Spain. The center of the U.S. outbreak, New York, also reported its number of daily deaths has been effectively flat for two days. Even though the U.S. is still bracing for a surge of deaths due to COVID-19 and New York’s governor said restrictions should stay in place to slow its spread, the encouraging signs were enough to launch the S&P 500 to its best day in nearly two weeks.

“We’re running on raw optimism, maybe that’s the best way to put it,” said Randy Frederick, vice president of trading and derivatives at Schwab Center for Financial Research.

Investors have been waiting anxiously for signs that the rate of new infections may be hitting its peak, which would give some clarity about how long the upcoming recession will last and how deep it will be. Without that, markets have been guessing about how long businesses will remain shut down, companies will lay off workers and flights remain canceled due to measures meant to slow the speed of the outbreak.

“The virus is not everything, it’s the only thing, and nothing else really matters” to the markets, Frederick said, particularly in a week that is relatively light on economic reports.

The latest gains are not likely to have much staying power, given how much uncertainty remains about when the pandemic will subside significantly and how much harm will have been inflicted to the economy, said Nela Richardson, investment strategist at Edward Jones.

“It’s not unusual, if you look back historically, within bear markets to have rallies,” Richardson said. “I wouldn’t take the uptick over the last two weeks as a sign of a bottoming or a sign of upside recovery from here on out. There’s still a lot of uncertainty to get through even as we’re hopefully nearing the peak in terms of new coronavirus cases.”

The S&P 500 is still down more than 21% since its record set in February, but the losses have been slowing since Washington promised massive amounts of aid to prop up the economy.

“Since this is a public health crisis, the response has been extreme,” Morgan Stanley strategists wrote in a report. “There are literally no governors on the amount of monetary or fiscal stimulus that will be used in this fight.”

Japan is set to announce a 108 trillion yen ($1 trillion) package to support the world’s third-largest economy, including cash handouts to needy families and help for small businesses. The plan is due to be outlined Tuesday, when Prime Minister Shinzo Abe is expected to announce a state of emergency that will ramp up precautions meant to curb the rapid spread of the virus.

Expectations have risen that Saudi Arabia and Russia may cut back on some of their production. Demand for oil has plummeted due to the weakening economy, and any cutback in production would help prop up its price. A meeting between OPEC, Russia and other producers initially planned for Monday was reportedly pushed back to Thursday.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 2,882.35.

The projected upper bound is: 2,973.00.

The projected lower bound is: 2,640.73.

The projected closing price is: 2,806.87.

Candlesticks

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 30 white candles and 20 black candles for a net of 10 white candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 3 rising windows in the last 50 candles–this makes the current rising window even more bullish.

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 80.0923. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 48.90. 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 43 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 152.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 9 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 5 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 48.148 at 2,812.135. Volume was 37% below average (neutral) and Bollinger Bands were 27% wider than normal.

Open     High      Low     Close     Volume___
2,806.9682,819.5532,801.8392,812.13516,314,236,928
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 2,762.99 2,891.44 2,934.10
Volatility: 23 37 23
Volume: 22,624,176,128 30,535,059,456 20,955,510,784

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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
SSE COMPOSITE is currently 4.2% below its 200-period moving average and is in an downward 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 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 15 periods.

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