The CSI 300 rose 1.9% this week on lower volume. The market remains in an Uptrend Under Pressure with four distribution days. China’s stronger-than-expected manufacturing November PMI data lifted investor sentiment and drove the rise this week. Most sectors gained and Technology stocks outperformed, which increases our conviction that the market could continue to rebound. However, Sino-U.S. trade talks remain volatile and the market is pausing as December 15 approaches, when the U.S. will impose more tariffs on Chinese goods. We advise investors to stay cautious and patient, waiting for more signals. The CSI 300 retook its 50- and 100-DMA. We see immediate support at ~3,850 (-1.3%), followed by 200-DMA support at ~3,800 (-2.6%). The index faces immediate resistance at the gap above (3,950, +1.2%). We expect the index to continue consolidating within the box and recommend focusing on leading names with strong growth outlook and potential benefits from policy stimulus. Avoid chasing extended ideas.
Symbol: CMT.CN
China A Shares
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.
Global Focus Emerging
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.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq consolidated gains this week, trad-
ing slightly lower but remaining above all major moving averages. The 21-DMA (S&P 500: 3,079; Nasdaq:
8,423) remains a primary level of near-term support. The distribution day count is low at two days each.
Nine of 11 sectors, 141 of 197 industry groups, and 67% of S&P 500 stocks are trading above their respective
50-DMA. Health Care is trading ~7% above its 50-DMA after breaking into new all-time highs this week. The
best performing industry groups this week include Biotech ( VRTX ), Long-Term Care ( AMED ), Managed Care
( UNH ), and Software ( SPLK ).
We remain positive on the general market. Despite sideways consolidation among the major averages, underly-
ing action across growth-oriented ideas and groups was very strong. Multiple ideas are breaking out from con-
solidation and pushing into higher highs. We continue to recommend selectively increasing risk in quality ideas
as they emerge from sound bases.
China A Shares
The CSI 300 dropped 0.7% for the week on lower volume. The market was downgraded to an Uptrend Under Pressure with four distribution days. It rallied for the first two sessions of the week, boosted by China’s cut of its reverse repo rate, and then reversed course for a three-day losing streak, erasing previous gains. About 65% of stocks were below their 200-DMA and previously leading sectors now lag the market. The market is still very weak and faces pressure from factors like the U.S.-China trade deal uncertainty and a possible economic downturn. Furthermore, fund managers tend to cash in profits as the end of the year approaches, which we believe caused leading sectors such as Consumer Staple and Health Care to plunge. In our view, Friday’s correction was more technical. Investors are advised to take a wait-and-see approach, staying cautious and patient. Don’t be too pessimistic and avoid chasing highs. Trim positions on extended ideas. We see the CSI 300’s next support at the 200-DMA (~3,780) following its break of 100-DMA support. Consistent resistance lies at the gap above (~3,950).
Global Focus Emerging
The CSI 300 dropped 0.7% for the week on lower volume. The market was downgraded to an Uptrend Under Pressure with four distribution days. It rallied for the first two sessions of the week, boosted by China’s cut of its reverse repo rate, and then reversed course for a three-day losing streak, erasing previous gains. About 65% of stocks were below their 200- DMA and previously leading sectors now lag the market. The market is still very weak and faces pressure from factors like the U.S.-China trade deal uncertainty and a possible economic downturn. Furthermore, fund managers tend to cash in profits as the end of the year approaches, which we believe caused leading sectors such as Consumer Staple and Health Care to plunge. In our view, Friday’s correction was more technical. Investors are advised to take a wait-and-see approach, staying cautious and patient. Don’t be too pessimistic and avoid chasing highs. Trim positions on extended ideas. We see the CSI 300’s next support at the 200-DMA (~3,780) following its break of 100-DMA support. Consistent resistance lies at the gap above (~3,950).
China A Shares
The CSI 300 dropped 2.4% for the week on lower volume and remains in a Confirmed Uptrend with three distribution days. Disappointing economic and financial data released this week significantly subdued market confidence, and five consecutive sessions of below-average volume indicate very cautious sentiment. However, we have not seen a large-scale selloff, so we recommend a wait-and-see approach. The China-U.S. trade deal still remains uncertain. We expect the index to continue consolidating around 3,820–4,000. The CSI 300 lost 50-DMA support, with the next support at the 100-DMA (~3,850) and the next resistance at the gap above ~3,970. We will be watching to see if the Chinese government introduces more policies to boost the domestic economy. Investors are advised to stay patient and focus on ideas that have recently broken out with strong fundamentals. Avoid chasing highs.
Global Focus Emerging
The CSI 300 dropped 2.4% for the week on lower volume and remains in a Confirmed Uptrend with three distribution days. Disappointing economic and financial data released this week significantly subdued market confidence, and five consecutive sessions of below-average volume indicate very cautious sentiment. However, we have not seen a large-scale selloff, so we recommend a wait-and-see approach. The China-U.S. trade deal still remains uncertain. We expect the index to continue consolidating around 3,820–4,000. The CSI 300 lost 50-DMA support, with the next support at the 100-DMA (~3,850) and the next resistance at the gap above ~3,970. We will be watching to see if the Chinese government introduces more policies to boost the domestic economy. Investors are advised to stay patient and focus on ideas that have recently broken out with strong fundamentals. Avoid chasing highs.
China A Shares
The CSI 300 rose 0.5% for the week on increased volume and remains in a Confirmed Uptrend with three distribution days. The market is in a weak rally, boosted by a surprising rate cut to mediumterm lending facilities and new signs of progress on the Sino-U.S. trade deal. The CSI 300 tested the high of its previous rally (~4,000) but retreated due to uncertainty surrounding the tariff rollback. Recent disappointing economic data also deflated market confidence. Unless a significant catalyst emerges, we expect the index to continue consolidating around consistent resistance at 4,000. We hope it holds above Monday’s gap (~3,964), which serves as immediate support. The next strong support is at the 50-DMA. We remain cautiously optimistic. Investors are advised to stay patient and focus on selecting stocks that have recently broken out with strong fundamentals. Keep an eye on key economic and financial data to be released next week, including October CPI/PPI, industrial value added, and fixed asset investment growth
Global Focus Emerging
The CSI 300 rose 0.5% for the week on increased volume and remains in a Confirmed Uptrend with three distribution days. The market is in a weak rally, boosted by a surprising rate cut to medium-term lending facilities and new signs of progress on the Sino-U.S. trade deal. The CSI 300 tested the high of its previous rally (~4,000) but retreated due to uncertainty surrounding the tariff rollback. Recent disappointing economic data also deflated market confidence. Unless a significant catalyst emerges, we expect the index to continue consolidating around consistent resistance at 4,000. We hope it holds above Monday’s gap (~3,964), which serves as immediate support. The next strong support is at the 50-DMA. We remain cautiously optimistic. Investors are advised to stay patient and focus on selecting stocks that have recently broken out with strong fundamentals. Keep an eye on key economic and financial data to be released next week, including October CPI/PPI, industrial value added, and fixed asset investment growth.
