When Will the Trouble in Chinese Markets End?
No Rebound for the Hang Seng, Yet
The Hang Seng Index is still in a technical downtrend. It is not showing any signs of recovering yet. After the chinese government pledged to aid equity markets, most of the chinese equity markets began to rally. Economic data has still been showing signs of contraction. This put a stop to the supposed rally in the Hand Seng.
Tech Might Be Showing More Promise
The Hang Seng Tech Index has climbed out of its technical downtrend on the shorter timeframes. But its price has remained rage bound near these historical low. We need to see a higher high print in the charts before we can be confident in any bullishness.
Shanghai is the Bright Spot
The bright spot in chinese markets is the Shanghai Composite Index. All sectors of the SSE Composite had a very strong week last week. The long-term trend is still negative, but the past few weeks have been showing signs of a potential rebound.
Personally, I would need to see more upward price action before I would be completely confident in a rebound. But the picture is looking much brighter in Shanghai.
The Financial Secor is Legging Up
There are just a few sectors, like the energy sector, that have remained bullish for a while now. One sector that has shown the most improvement over the past several weeks is the financial sector.
The financial sector has officially flipped from bearish to bullish recently. You can see a chart of the equal weighted financial sector with weekly candles directly below. Notice the higher low on the chart with increasing volume at the rebound and on the way up. These are two bullish signals in the long-term picture.
On the shorter term, the picture looks bullish as well. We recently saw a breakout. The price came back down to retest the newly formed support and had a sharp rebound. The long candle wick signifies a sharp rebound off of support. Things look quite bullish in the long and short term for financials.
Conclusion
The financial sector in Shanghai looks like a good investment opportunity at the moment. Personally, I would find a rallying company within this sector and ride the wave up. Here are a few examples of some banks that have been rallying recently.
As for the rest of chinese markets, like the major indices, I think a little more upside is needed before investors will be completely confident in a potential rebound from these historical lows.
Good Luck Trading
As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Don't invest money that you can't afford to lose. Give some of your investments time and know when to cut your losses.
Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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SpyderCallOP : @102640653
102640653 SpyderCallOP: If Shanghai market starts with bullishness trend it will definitely lend support to the hangseng index which had been hit quite badly in recent weeks. Hopefully the bullishness in Shanghai stands strong . Good luck
MonkeyGee : This is China's 2008!
102489169 : Agreed! Follow the trends. Invest $ that we understand, can afford to lose and know when to cut loss. Good advice.
股海踏浪 : Volume comes first before price. There was a time when a real big market didn't come out of a huge amount at the bottom? But now this amount is just a small rebound.