Swing: Patience required to go long on CSI300 (23/04/19)

SZSE:399300   CSI 300 INDEX
The CSI 300 Index of equities traded in Shanghai and Shenzhen sank 2.3 percent on Monday, its biggest loss in a month, with five stocks falling for each that rose. Property developers led the plunge, along with companies reliant on consumer discretionary spending and so-called old economy shares such as banks and industrial companies.

After the CSI 300 surged almost 40 percent this year, investors have grown increasingly sensitive to whether the authorities will maintain the massive scale of stimulus seen in the first quarter. A statement late Friday from a meeting of the Politburo was interpreted by traders as meaning the economy is on a stable enough footing that extended support isn’t needed. Instead there was a focus on deleveraging and avoiding speculation in the housing market.

"People have come to a clear consensus that there won’t be any aggressive stimulus that floods the economy with excessive liquidity, indicating limited room for valuation recovery," said Dai Ming, a Shanghai-based fund manager with Hengsheng Asset Management Co. "The market is entering a consolidation period that may last one to two months."


CSI 300 Index is in a healthy uptrend but with news released yesterday, we expect a selling momentum to continue through to the next level of support. A good place for a long will be at 3458 level shaded in yellow.

EP: 3458
SL: 3180
TP: 4730

Best Regards,
Nour Capital - Tracking Smart Money Flow

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