Shanghai: SSE Composite Index (.SSEC) trading remains subdued as investors awaited cues from the U.S.-China trade negotiations

Shanghai: SSE Composite Index (.SSEC) trading remains subdued as investors awaited cues from the U.S.-China trade negotiations

Shanghai: SSE Composite Index (.SSEC) trading remains subdued as investors awaited cues from the U.S.-China trade negotiations

Chinese stocks ticked up on Monday on expectations of further policy support, but trading remained subdued as investors awaited cues from the U.S.-China trade negotiations at the G20 summit later this month.

At the close, the Shanghai Composite index was up 0.2% at 2,887.62, while the blue-chip CSI300 index was flat.

CSI300’s financial sector sub-index ended 0.4% higher, the consumer staples sector lost 1%, the real estate index was down 0.3% and healthcare shares gained 0.4%.

The smaller Shenzhen index ended down 0.2% and the start-up board ChiNext Composite index was weaker by 0.8%.

U.S. President Donald Trump said on Friday “it doesn’t matter” if Chinese leader Xi Jinping attends the G20 summit later this month, predicting a trade deal with Beijing would occur at some point anyway.

The U.S. Trade Representative’s Office on Monday will kick off seven days of testimony from U.S. retailers, manufacturers and other businesses about Trump’s plan to hit another $300 billion worth of Chinese goods with tariffs.

The U.S. Federal Reserve is meeting on June 18-19, with a press conference scheduled for a second day. Markets are almost pricing in a 25 basis point cut for July.

More dovish policies by central banks worldwide could afford the People’s Bank of China (PBOC) more room to ease interest rates, according to a Great Wall Securities note published on Monday.

The Chinese central bank said the second phase of a cut in the reserve requirement ratio freed about 100 billion yuan ($14.44 billion) worth of long-term funds. In open market operations, it injected 150 billion yuan via 14-day reverse repos.

On Friday, China’s central bank said it will increase the re-discount quota by 200 billion yuan and the standing lending facility quota by 100 billion yuan hours after the country reported that industrial output growth unexpectedly slowed to a more than 17-year low in May. 

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 3,007.19.

The projected lower bound is: 2,756.74.

The projected closing price is: 2,881.97.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black 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 63.8049. This is not an overbought or oversold reading. The last signal was a sell 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 45.65. 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 25 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 1. This is not a topping or bottoming area. The last signal was a buy 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 buy 14 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 5.648 at 2,887.622. Volume was 50% below average (consolidating)(neutral) and Bollinger Bands were 69% narrower than normal.

Open High Low Close Volume___
2,880.4232,902.4812,877.3942,887.62215,396,496,384

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

Moving Averages: 10-period 50-period 200-period
Close: 2,880.91 3,014.23 2,782.84
Volatility: 20 27 27
Volume: 20,127,586,304 26,997,786,624 21,649,166,336

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 3.8% above its 200-period moving average and is in an upward 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 bullish on .SSEC and have had this outlook for the last 1 periods.

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