Shanghai: SSE Composite Index (.SSEC) stocks up despite virus jitters

Shanghai: SSE Composite Index (.SSEC) stocks up despite virus jitters

Shanghai: SSE Composite Index (.SSEC) stocks up despite virus jitters

Hong Kong stocks ended the morning session higher on Monday, as investors mull the potential economic fallout from the spreading coronavirus.

The Hang Seng Index rose 0.5 percent, to 27,940 by the break.

On the mainland, the Shanghai Composite Index jumped 1.3 percent, to 2,955 while the Shenzhen Composite Index soared 2.2 percent, to 1,819.

But other Asian markets were weighed down after China said the infections topped 70,500.

While investors are comforted by a slowdown in new infections outside hardest-hit Hubei province in recent days, they might be less sanguine if China’s economy takes a worse-than-expected hit, said Stephen Innes of AxiCorp.

“If it comes out bad enough for confidence to plummet, investors could quickly find themselves up the creek … without a paddle,” Innes said in a commentary.

“Financial markets are not known for their rational thinking lately and given the 500 million or so mainlanders affected by the (Covid-19) quarantine … it’s also not hard to come up with more downside risks than upside ones right now.”

There was more grim news on Monday. Japan’s economy suffered its worst quarterly contraction in more than five years, while Singapore cut its growth forecast for this year as the virus batters the city-state’s tourism and trade.

Tokyo’s benchmark Nikkei 225 index was down 0.6 percent after the economy shrank 1.6 percent in the three months to December from the previous quarter, even before the novel coronavirus outbreak in China hit Japan, official data showed.

Elsewhere, Sydney fell 0.1 percent, Taipei shed 0.51 percent and Seoul was flat.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 3,111.48.

The projected lower bound is: 2,859.52.

The projected closing price is: 2,985.50.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 9 white candles and 1 black candles for a net of 8 white candles. During the past 50 bars, there have been 33 white candles and 17 black candles for a net of 16 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 83.0921. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 8 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 53.30. 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 8 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 59. This is not a topping or bottoming area. The last signal was a buy 7 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 66.615 at 2,983.622. Volume was 65% above average (neutral) and Bollinger Bands were 154% wider than normal.

Open     High      Low     Close     Volume___
2,924.9912,983.6372,924.9912,983.62231,319,799,808
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 2,886.96 2,978.24 2,946.96
Volatility: 15 28 22
Volume: 29,511,649,280 22,581,577,728 19,520,428,032

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 1.2% above 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 10 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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