Author: Sandeeep N

The CSI 300 rose 2.53% for the week on trading volume in line with the 50-day
average. It remains in an Uptrend Under Pressure with a distribution day count
of three. Driven by the policy that special bond funds can be used as capital
for major projects, the index rallied more than 3% on Tuesday, followed by a
three-day losing streak, which indicated that short-term policy stimulus may not
be sustainable; the index is expected to continue to consolidate. The CSI 300 is
testing the 100-DMA, which provides the next immediate support. If the index
cannot hold up, the next support is at ~3,556. The previous two highs of ~3,723
and ~3,745 provide the next resistance. Published after Friday’s close, China’s key
macroeconomic data for May continued to weaken. May’s industrial production
and fixed investment growth continued to fall, showing that the economic
downturn pressure has increased.