Shanghai: SSE Composite Index (.SSEC) weak sentiment ahead of G20 meeting
China’s stock markets fell on Thursday as fragile investor sentiment shattered earlier gains, and as trading volumes remained lighter than average ahead of a widely anticipated meeting between the U.S. and Chinese presidents this weekend.
At the close, the Shanghai Composite index was 1.4 percent lower at 2,567.44 points. The blue-chip CSI300 index was down 1.3 percent, with its financial sector sub-index lower by 1.37 percent, the consumer staples sector down 0.36 percent, the real estate index down 2.47 percent and the healthcare sub-index down 0.55 percent. Trading was relatively light, with about 15.72 billion shares trading on the Shanghai exchange, roughly 87.6 percent of the market’s 30-day moving average of 17.94 billion shares a day. The volume in the previous trading session was 14.60 billion.
The smaller Shenzhen index ended down 2.21 percent and the start-up board ChiNext Composite index was weaker by 2.115 percent. Analysts at China Fortune Securities said that a recent rebound did not mean that the market’s correction has finished, highlighting the importance of a planned meeting this weekend between Chinese President Xi Jinping and U.S. President Donald Trump in Argentina. Ongoing uncertainty in Sino-U.S. trade relations will mean the market will be mainly led by changes in risk appetite in the near future, the analysts said. “Typically in markets led by risk appetite, good or bad information can easily spark severe volatility.”
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 2,703.41.
The projected upper bound is: 2,696.97.
The projected lower bound is: 2,434.37.
The projected closing price is: 2,565.67.
A black body occurred (because prices closed lower 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 25 white candles and 25 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with SSE COMPOSITE), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 20.3050. This is not an overbought or oversold reading. The last signal was a buy 0 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 41.61. 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 29 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 -92. 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 4 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -34.293 at 2,567.443. Volume was 8% above average (neutral) and Bollinger Bands were 28% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,622.46 2,646.15 2,925.35
Volatility: 22 32 25
Volume: 17,742,383,104 15,972,126,720 14,784,031,744
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 12.2% below 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 10 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.