flyinkiwi10

Shanghai SSE sharp bearishness and key level 3288.45

Short
SSE:000001   SSE COMPOSITE
Thanks for viewing.

I'm not a trader in SSE , or an investor.

General bullishness since December 2018 has recently been met with some strong resistance and selling pressure. Apart from finding myself here after reading the news today, where the commentator predicted more "risk" in the market, I don' really track this index.

I'm not a follower of the fundamentals of the market, but have some geopolitical insight. Whatever government intervention caused the sell-off, these are the technicals as I see them.

RSI: ~35 which is "oversold" but that can always go lower... or even stay at similar levels while the price grinds lower. No bullish divergence present on daily scale.

MACD: daily histogram shows below the zero line and in a steep downtrend. The moving averages have crossed over to the downside and are still diverging (converging would mean a slowing in the trend direction.

I am using Elliot Wave (which a lot of people don't really use for whatever reason) and there is a very clear support level that has to hold if your view is for continued bullishness: It is the 3288.45 level. If this level doesn't hold then the 18 month general bull-trend is over for a while. I put a couple of blue boxes as possible near-term support - even if that 3288 level is cracked, but unless you are trained to catch knives....

Either we are in a larger bullish market and this is a small (albeit very sharp correction), or there is a more extensive downwards correction underway. Personally, I wouldn't hang around to find out as the market seems to look corrective (downwards) in nature on the weekly time-frame as well.

If all the news and stories pumped out of China are true in the last 20 years... this isn't reflected in their stock market price trend. That said, the general trend - minus some massive run-ups seems to be slow and steady and there is some multi-year trend-line support at around 2800.

Let's see I guess. Best of luck and look after those funds.


Comment: If 3288 is exceeded it will indicate that further correction is requires... medium term that would indicate 2400 - 2600 levels incoming.