Shanghai: SSE Composite Index (.SSEC) up after U.S. central bank’s recent shift towards a more “patient” approach on policy in the face of a slowing economy
Shanghai stocks ended up on Wednesday, after Federal Reserve Chairman Jerome Powell reinforced the U.S. central bank’s recent shift towards a more “patient” approach on policy in the face of a slowing economy.
The blue-chip CSI300 index fell 0.2 percent, to 3,678.39, while the Shanghai Composite Index rose 0.4 percent to 2,953.82 points.
The Fed is in “no rush to make a judgment” about further changes to interest rates, Powell told U.S. lawmakers on Tuesday as he spelled out the central bank’s approach to an economy that is likely slowing.
In two hours of testimony to the Senate Banking Committee, Powell elaborated on the “conflicting signals” the Fed has tried to decipher in recent weeks, including disappointing data on retail sales and other aspects of the economy that contrast with steady hiring, wage growth, and ongoing low unemployment.
There would be technical consolidation before the benchmark Shanghai index moves past the 3000-point-level, a psychologically key level seen by many participants.
So far this year, the Shanghai stock index is up 18.4 percent and the CSI300 has risen 22.2 percent , while China’s H-share index listed in Hong Kong is up 13.3 percent. Shanghai stocks have risen 14.29 percent this month.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 2,697.23.
The projected upper bound is: 3,057.91.
The projected lower bound is: 2,864.51.
The projected closing price is: 2,961.21.
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.
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 86.8176. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 4 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 80.39. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 4 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 160.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 16 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 buy 32 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 12.308 at 2,953.824. Volume was 168% above average (trending) and Bollinger Bands were 131% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 2,808.60 2,614.89 2,754.27
Volatility: 36 23 25
Volume: 33,568,208,896 18,277,007,360 15,086,777,344
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 is currently 7.2% above its 200-period moving average and is in an upward 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 very strong flows of volume into .SSEC (bullish). Our trend forecasting oscillators are currently bullish on .SSEC and have had this outlook for the last 26 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an overbought condition.
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