Bearish China market (2012-01-13 SSEC analysis)

Daily chart of Shanghai Composite Index (.SSEC):















Clearly it has just reached the first resistant line inside its channel. We have to further observe whether it will break out or it is going to drop.

Weekly chart of SSEC:















After looking at the weekly chart, it seems like the index is still at bearish trend. Trend reversal happens only when there is a breakout of the red channel.

Target is given by the fibonacci projection on the chart. The levels are supports as well.

Trend reversed? (2011-06-24 SSEC analysis)

Above is the daily chart of Shanghai Stock Exchange Composite (.SSEC). The chart tells us that probably the China market has turned its direction, and could lead Hong Kong market to turn as well.

The composite has been sliding along the green down-trend line since April 2011, and it could never cross above this line.

However, yesterday SSEC finally made its way above the line, with a big white candle. This suggests that the few-month bearish trend may have come to an end.

Volume surged as well, further confirming the break out. But it takes two more days to make sure it is not a false break out.

MACD and its EMA shows a bullish cross signal too. But we have to be extremely careful of zig-saw patterns which appears several times in past few months.

So next, how much would it go? By using a fibonacci retracement, SSEC probably stops at around 50%, which is around 2800.

So this is hopefully a temporary stop for such a bearish market.

Time to choose (2011-05-17 SSEC analysis)

Hang Seng Index was unable to remain above 23,000 yesterday and closed at 22960. We could see the China markets were plunging as well, but EU and US markets showed no sign of great slump. Therefore, we could comfortably assume a close relationship between HK markets and China markets in near future.

Next, I have analyzed Shanghai Composite Index (.SSEC).



Above is the daily chart of SSEC. The green line is a long-term up-trend line which is expected to provide support now, as the index is touching the line.

On the other hand, the red is a medium-term down-trend line which would resist the index from surging beyond it.

While the two lines are converging, it is time for SSEC to choose which side to break, just like the situation HSI is facing now.

Though yesterday HSI is trying to break down, the magnitude from the support and close wasn't that large. We could still treat it as "above the support".

And then it would all depend on how the China market moves. If SSEC bounces tomorrow, we should see HSI follow.

If SSEC breaks downwards, then we have to observe and see whether to confirm a break down for HSI or not. Normally, we can confirm if HSI is still below the support this Friday.

How china makret goes (2011-04-08 SSEC analysis)

HSI consolidated a bit yesterday, showing a lack of buying power which could push it to higher level. Nevertheless, the index could remain above the resistance line, it means that the breakout confirms.

Rather than looking at Hong Kong market itself, let's see how the China market is going.

Daily chart of SSEC:


Since Jan 2011, it has been rising along the red up-trend line. The index tried two times to break the level of around 3,000, but obviously it failed.

Currently, it reaches this resistance again. Its time for SSEC to have its third trial.

Looking at the chart soley, I am not too optimistic with it. Firstly, it is clear that this level has extremely strong resistance. Strong buying power would be needed for a breakout.

Secondly, MACD and its EMA are having whipsaw. Also, they are at almost the highest level in the past few months, suggesting that there is not much bullish momentum for SSEC.

Therefore, I expect it to drop a bit. The red line could still act well to support SSEC at around 2960.

3000 remains a very strong resistance. It might take some time to break it, when the red trend line finally meets 3000 level.

If the index breaks upwards, 3122 is the next resistance analyzed using fibonacci projection.

Good luck everyone

Over-performed China Stock market (2011-02-11 SSEC analysis)

Yesterday was an interesting day. HSI dropped slightly less than 2%, while SSEC rose 1.59%. Many of us may wonder, will HSI tend to move towards SSEC, or SSEC will reverse direction and follow the trend of HSI?

Daily chart of SSEC:


The index has been sliding along the red wedge for over two months. Recently, it broke the upper red line. It shows that the bull power is quite strong.

On the other hand, I have identified a short-term pitchfork which is shown in purple. SSEC is currently testing the middle line of the fork. It acts as a resistant to the index.

If SSEC breaks the middle line of the fork, next resistance will be at next fibs-level, which is around 2855.

However, before understanding the weekly chart, do not be too confident on the breakout on daily chart.

Weekly chart of SSEC:


The long red line represents a long-term resistance to the index. Though there were a few false breakouts two months ago, it dropped back below the resistance then.

SSEC is currently testing the red line again.

Also, I have drawn two parallel up-trend lines (in green). SSEC broke down the triangle from above. This time, SSEC moves towards the end of the triangle. Would history repeat itself? Time will tell.

One more thing to add, volume has shrunk significantly. This is a bad signal for the index.

To conclude, there are pitchfork and down-trend line as resistances on daily and weekly chart respectively. Volume dropped greatly which tells us that investors lack confidence on stocks now. We could expect SSEC to drop, and will test the green up-trend line.