Shanghai: SSE Composite Index (.SSEC) support for the nation’s struggling private sector
Chinese stocks jumped the most in more two years after top officials continued to express support for the nation’s struggling private sector. The Shanghai Composite Index rose 3.1 percent to 2,629.90 as of 10:11 a.m. local time, the biggest advance since May 2016 and extending Friday’s gain. Over the weekend, President Xi Jinping vowed “unwavering” support for non-state firms, while the country’s stock exchanges committed to help manage share-pledge risks. China also released its widely-expected plan to cut personal income taxes after data showed the nation’s economy grew at the slowest pace since 2009.
Chinese stocks had rallied on Friday following a rare coordinated effort from top financial officials to support the equity market, after margin calls and forced selling accelerated this year’s downward spiral. The nation’s share market has still lost more than $3 trillion in value since January, amid concern a liquidity crunch and the U.S. trade dispute would hurt economic growth. The Shanghai Composite is the world’s worst performing global benchmark in 2018, falling below 2,500 points last week for the first time in almost four years.
Shares of securities firms, which are among the biggest lenders to private firms trading on the mainland, surged onshore and in Hong Kong. Moves by authorities to reduce stock-pledge risks should stabilize the equity market and help lift valuations for Chinese brokers, according to Goldman Sachs Group Inc. Shares of Orient Securities Co., Citic Securities Co. and Huatai Securities Co. rose at least 8 percent.
The yuan fell 0.1 percent to 6.9423 per dollar. U.S. Treasury Secretary Steven Mnuchin said he’s open to changing how the U.S. determines which nations are gaming their currencies, after refraining to labeling China a currency manipulator in a semi-annual report last week.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 2,745.77.
The projected upper bound is: 2,782.55.
The projected lower bound is: 2,523.78.
The projected closing price is: 2,653.16.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 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.
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 59.2643. This is not an overbought or oversold reading. The last signal was a buy 1 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 49.14. 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 1 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 -14. This is not a topping or bottoming area. The last signal was a buy 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 7 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 104.411 at 2,654.876. Volume was 64% above average (neutral) and Bollinger Bands were 65% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,600.50 2,706.70 3,037.40
Volatility: 48 31 24
Volume: 14,500,798,464 12,237,259,776 15,102,251,008
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 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 12.6% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 6 periods.