Shanghai: SSE Composite Index (.SSEC) upbeat retail sales and factory output numbers pointed to some stabilization

Shanghai: SSE Composite Index (.SSEC) upbeat retail sales and factory output numbers pointed to some stabilization

Shanghai: SSE Composite Index (.SSEC) upbeat retail sales and factory output numbers pointed to some stabilization

Chinese shares closed firmer on Monday as China’s upbeat retail sales and factory output numbers pointed to some stabilization, with second-quarter economic data meeting expectations, while technology shares rebounded from previous week’s sharp declines. At the close, the Shanghai Composite index was up 0.4% at 2,942.19.

The blue-chip CSI300 index climbed 0.41%, with its financial sector sub-index ending up 0.17%, the consumer staples sector closing 0.07% higher, the real estate index down 0.11% and the healthcare sub-index up 0.35%. China’s economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure.

But the pace was in line with analysts’ expectations for the slowest since the first quarter of 1992, the earliest quarterly data on record, and more upbeat June factory output and retail sales offered signs of improvement. Technology firms posted the day’s strongest gains, with a sub-index tracking IT companies adding 2.32%, and one tracking computer firms jumping 3.09%. Tech shares had come under pressure last week as 21 firms sought subscriptions from investors for their initial public offerings on China’s new tech-heavy STAR Market, diverting market funds.

“Tech names had a challenging performance last week which in the light of today’s macro data was arguably overdone,” Gerry Alfonso, director at Shenwan Hongyuan Securities, said in a note. Helping to support financial market sentiment, China’s central bank said it would lend 200 billion yuan to financial institutions through its one-year medium-term loan facility (MLF), rolling over a batch of MLF loans worth 188.5 billion yuan maturing Monday, and injecting an additional 11.5 billion yuan in one-year cash.

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 2,958.06.

The projected upper bound is: 3,037.61.

The projected lower bound is: 2,838.87.

The projected closing price is: 2,938.24.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 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 spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 57.3670. 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 46.98. 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 46 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 -54. This is not a topping or bottoming area. The last signal was a buy 2 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 6 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed down -4.569 at 2,937.617. Volume was 53% below average (consolidating) and Bollinger Bands were 46% narrower than normal.

Open High Low Close Volume___
2,938.6412,944.8212,931.2922,937.61713,181,174,784

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

Moving Averages: 10-period     50-period     200-period
Close: 2,953.66 2,924.87 2,809.60
Volatility: 16 22 27
Volume: 16,365,446,144 20,429,475,840 22,560,696,320

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 4.6% above its 200-period moving average and is in an downward 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 bearish on .SSEC and have had this outlook for the last 0 periods.

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