Is China index oversold?
I do not think so from both short term fundamental reason as well as trend analysis.
I expect the price to fall through the inner bullish trend line (dotted) and heads much further south.
To help support my chart, I use Relative Strength Indicator (RSI) to determine if it is oversold. You can see that it still has some room to move down.
To exacerbate the situation , now China is facing a double whammy - Coronavirus without a cure as yet and now the deadly bird flu has returned. Read article here
This will add more panic and fear to the locals and in fact many people worldwide as well.
When China equity market opens tomorrow, imagine all the locals holding on to their local stocks that has been suspended, I believe many would gap down or plunge down hard , driving the index down as well.
Be extra cautious now in your trading/investment !
I do not think so from both short term fundamental reason as well as trend analysis.
I expect the price to fall through the inner bullish trend line (dotted) and heads much further south.
To help support my chart, I use Relative Strength Indicator (RSI) to determine if it is oversold. You can see that it still has some room to move down.
To exacerbate the situation , now China is facing a double whammy - Coronavirus without a cure as yet and now the deadly bird flu has returned. Read article here
This will add more panic and fear to the locals and in fact many people worldwide as well.
When China equity market opens tomorrow, imagine all the locals holding on to their local stocks that has been suspended, I believe many would gap down or plunge down hard , driving the index down as well.
Be extra cautious now in your trading/investment !
Comment:
www.scmp.com/busines...ing-fails-stem-panic
Not sure when the TV chart will be updated above but as soon as it does, it will reflect the severe drop down. Please note that if the Government has not intervene with limitation on short sell to the securities firms and pump in money to the market, it is likely going to be a lot worse. Again, imo, the bloodbath is not over so if any analysts or friends tell you it is cheap to go shopping now, do yourself a favour and study the chart first. And ask this commonsense questions :
1. Are more cities being forced to shutdown ?
2. Are there more people worldwide afflicted with this virus ?
3. Are the medical team receiving the much needed medical resources or are they still exposed to the virus while making efforts to treat the patients ?
4. Donations channeled to the various charities - are they properly distributed or still stuck in some bureaucratic system that requires approval ?
5. H5N1 virus - if this is not contained and break out as well, will this add on to the stress that China is currently facing ?
6. Productivity - millions of immigrants that are not returning to the workforce - short term solution is to delay and ask them to take leave and stay at home. but for how long ? The service sector need people , no matter how much machines and robots we are talking about in China. A large part of it still needs the manual labours - construction workers, waiters, cleaners, food deliverymen, warehouse attendants, security guards, etc.
7. Phase 1 agreement - with the already slowdown in China economy and China agreeing to purchase 200 billion worth of goods from US. That was prior to the virus outbreak. With this situation , how likely is China going to honour their words ? is there any clause to protect them due to natural disasters like this ? And President Trump is feeling anxious as his re-election is around the corner , is he going to get all feisty and start implementing the tariffs tweet again? Will his move be the final straw that breaks the camel's back and tip the stock market into a bear market that many analysts and gurus been saying for years - Marc Faber, Jim Rogers, Peter Schiff, Ray Dalio, Kyle Bass,etc
Please , please trade cautiously , reduce your positions, take profits if you think you cannot stomach the risks and volatility. Do not rush to buy or short unless you have a clear strategy. Let the smoke passed and you can see clearer , then decide on the next course of action. Trade safely
Not sure when the TV chart will be updated above but as soon as it does, it will reflect the severe drop down. Please note that if the Government has not intervene with limitation on short sell to the securities firms and pump in money to the market, it is likely going to be a lot worse. Again, imo, the bloodbath is not over so if any analysts or friends tell you it is cheap to go shopping now, do yourself a favour and study the chart first. And ask this commonsense questions :
1. Are more cities being forced to shutdown ?
2. Are there more people worldwide afflicted with this virus ?
3. Are the medical team receiving the much needed medical resources or are they still exposed to the virus while making efforts to treat the patients ?
4. Donations channeled to the various charities - are they properly distributed or still stuck in some bureaucratic system that requires approval ?
5. H5N1 virus - if this is not contained and break out as well, will this add on to the stress that China is currently facing ?
6. Productivity - millions of immigrants that are not returning to the workforce - short term solution is to delay and ask them to take leave and stay at home. but for how long ? The service sector need people , no matter how much machines and robots we are talking about in China. A large part of it still needs the manual labours - construction workers, waiters, cleaners, food deliverymen, warehouse attendants, security guards, etc.
7. Phase 1 agreement - with the already slowdown in China economy and China agreeing to purchase 200 billion worth of goods from US. That was prior to the virus outbreak. With this situation , how likely is China going to honour their words ? is there any clause to protect them due to natural disasters like this ? And President Trump is feeling anxious as his re-election is around the corner , is he going to get all feisty and start implementing the tariffs tweet again? Will his move be the final straw that breaks the camel's back and tip the stock market into a bear market that many analysts and gurus been saying for years - Marc Faber, Jim Rogers, Peter Schiff, Ray Dalio, Kyle Bass,etc
Please , please trade cautiously , reduce your positions, take profits if you think you cannot stomach the risks and volatility. Do not rush to buy or short unless you have a clear strategy. Let the smoke passed and you can see clearer , then decide on the next course of action. Trade safely
Artificially propped up by the Government, the market forces will , imo, drives down the share prices hard in the coming weeks......