Author: Sandeeep N

The CSI 300 increased 1.3% for the week on lower volume and remains in a Confirmed Uptrend with three distribution days. Trading on the Nasdaq-style board enhanced activity in the technology sector and improved market sentiment and risk appetite. The market as a whole rebounded this week but volume remained low, indicating wait-and-see sentiment. The CSI 300 is 2.7% above its 100-DMA and 3.2% above its 50-DMA. Next support is at ~3,800 and ~3,700 and resistance is at ~3,900. China and the U.S. will have high-level face-to-face trade talks in Shanghai on July 30 and 31 for the first time since talks broke down in May, but no major breakthroughs are expected. In the near term, market focus shifted to the U.S. Federal Reserve meeting and domestic policy direction (the results of the July politburo). We believe that the index will continue sideways in a narrow range, and we suggest that investors focus on leading stocks that have broken out of patterns or key support levels on heavy volume.

The CSI 300 fell 0.02% for the week on slightly increased but still-below-average volume. The market remains in a Confirmed Uptrend with two distribution days. Recently released macro data was not as expected, and there is still the possibility of U.S.-China trade war tensions, leading to a strong wait-and-see market sentiment and continuous volatility. Interest rate cuts by several countries’ central banks boosted global capital markets. The CSI 300 is still weak, oscillating around ~3,800. We are looking for the index to hold support above the 100-DMA, near 3,796. Failure to hold this level would raise concern. The next support is the 50-DMA or the gap below (~3,715). Given that the market is waiting for the opening of Nasdaq-style tech board next Monday, we expect it to continue sideways. We advise investors to stay patient and focus on leading stocks that are trading constructively with a high probability of excellent Q2 earnings results.