Shanghai: SSE Composite Index (.SSEC) traders cautious ahead of key data release for June

Shanghai: SSE Composite Index (.SSEC) traders cautious ahead of key data release for June

Shanghai: SSE Composite Index (.SSEC) traders cautious ahead of key data release for June

China’s stocks extended their steepest decline in nine weeks on Tuesday, as concerns about global monetary policies and increased stock supply continued to weigh on sentiment.

The Shanghai Composite Index fell 0.2 per cent to 2,928.19. The benchmark had tumbled 2.6 per cent in the previous session on fears the Federal Reserve would not cut interest rates soon amid improved US jobs data and a slew of IPOs would drain liquidity.

Hong Kong’s Hang Seng Index slid for a fifth session. It fell 0.8 per cent to 28,116.28.

Traders also refrained from buying on dips before the release of a set of key economic data for June. The National Bureau of Statistics is expected to release June consumer and factory-gate inflation data on Wednesday, while trade figures are due on Friday.

“The market hasn’t stabilised and the headwinds are still there, weighing on the market,” said Wu Kan, an investment manager at Soochow Securities in Shanghai. “Investors remain cautious.”

As many as 23 companies will be launching initial public offerings on the mainland’s exchanges this week. Of these, some 21 companies are seeking to list on the Science and Tech Innovation Board, also known as the Star Market, that will start trading from July 22.

The 25 companies that have been approved by the Shanghai bourse to trade on the tech board plan to raise a combined 31.1 billion yuan (US$4.52 billion) from the IPOs – more than three times the amount raised from offerings so far this year.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 3,050.53.

The projected lower bound is: 2,794.99.

The projected closing price is: 2,922.76.

Candlesticks

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 25 white candles and 25 black candles.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

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 16.3878. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 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 44.48. 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 41 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 -172.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 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 1 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -5.134 at 2,928.229. Volume was 51% below average (consolidating) and Bollinger Bands were 37% narrower than normal.

Open High Low Close Volume___
2,928.8192,937.7622,912.8062,928.22914,511,059,968

Technical Outlook
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period     50-period     200-period
Close: 2,993.40 2,937.15 2,803.28
Volatility: 22 27 27
Volume: 19,367,577,600 21,892,909,056 22,456,639,488

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 4.5% above its 200-period moving average and is in an upward 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 bullish on .SSEC and have had this outlook for the last 17 periods.

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