The CSI 300 dropped 0.55% this week on higher volume and added one distribution day, taking its total to four. The market remains in an Uptrend Under Pressure. China’s November industrial profit, announced Wednesday, widened to a record decline, dampening market sentiment. Ongoing China-U.S. trade negotiations also increased market volatility. Health Care and Staple stocks continued their weakness this week. Longtime leader Kweichow Moutai (
) incurred heavy selling pressure, raising concerns that the market trend may shift. Investors are advised to trim positions in the most extended ideas and watch stocks that are construction-related and could benefit from China’s fiscal and monetary stimulus. The CSI 300 broke below its 100-DMA and is testing immediate support at the 200-DMA (~3,800, +0.7%). If 200-DMA support fails, the next support is at August lows of ~3,575 (+7%). Investors may want to pay attention to China’s November manufacturing PMI, to be released Saturday.
