The CSI 300 fell 0.49% on higher volume. The market remains in an Uptrend Under Pressure with five distribution days. The index gapped lower Monday, trending higher to hit a weekly high Thursday but fell below its 21-DMA and 50-DMA (~4,715, +0.4%) again on Friday. The next support is at the gap (4,640, +1.2%) of October 9.
Symbol: CMT.CN
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 declined 30bps yesterday in lower volume, remaining slightly below its 50-DMA (3,409). The Nasdaq gained 64bps also in lower volume, holding above its 50-DMA (11,318). The distribution day count fell back to six and three days, respectively, with no further expiration until the end of next week.
China A Shares
The CSI 300 fell 1.53% on lower volume and remains in an Uptrend Under Pressure with four distribution days. The index is still trading above its 50-DMA (~4,715, -0.1%) with resistance at July’s high of ~4,900 (+3.9%). The index opened higher Monday but reversed down, disappointed by Q3 GDP growth of 4.9% y/y, missing estimates of 5.2%. Fixed-asset investment was up 0.8% y/y for the first nine months, slightly lower than consensus. Value-added of industrial output grew 6.9% y/y, and retail sales increased 3.3% y/y for September, both beating estimates and improving from August. The index was dragged down and ended lower this week due to profit-taking in sectors that made large gains so far this year, with Health Care and Technology lagging. Low-valuation sectors Financial and Consumer Cyclical showed relative strength. We expect the index to remain rangebound in the near team before the U.S. presidential election and due to strong resistance at 4,900. We recommend investors be cautious and closely watch the Q3 results coming next week, which could be a major driver for stock performance. Avoid chasing highs.
Global Focus Emerging
The CSI 300 fell 1.53% on lower volume and remains in an Uptrend Under Pressure with four distribution days. The index is still trading above its 50-DMA (~4,715, -0.1%) with resistance at July’s high of ~4,900 (+3.9%).
China A Shares
The CSI 300 rose 2.36% on higher volume and remains in an Uptrend Under Pressure with the number of distribution days decreasing to four. The index faces resistance at July’s high of ~4,900 (+2.3%) and has support at its 50-DMA (~4,714, -1.6%). It closed with good gains in the first two sessions of the week, boosted by data showing signs of economic recovery and tourism rebound during the holiday. September macro data were mostly encouraging. Exports grew 9.9% y/y, while imports surged 13.2% y/y, both higher than estimates and August’s figures. M2 rose 10.9% y/y, also beating consensus. Total social financing increment was RMB 3.48T, slightly lower than August, but RMB financing increment was much higher than consensus, indicating improving production. However, shares trended downward from Wednesday to Friday as both PPI and CPI turned lower and investors adopted a wait-and-see attitude before the U.S. elections and Q3 earnings. Q3 GDP will be released next Monday. We expect the index to remain range-bound before it breaks above key resistance at 4,900. We recommend investors be patient and focus on quality ideas setting up new bases.
Global Focus Emerging
The CSI 300 rose 2.36% on higher volume and remains in an Uptrend Under Pressure with the number of distribution days decreasing to four. The index faces resistance at July’s high of ~4,900 (+2.3%) and has support at its 50-DMA (~4,714, -1.6%).
China A Shares
The CSI 300 gapped up and gained 2.0% in this one-day week after the holiday. Volume was higher but still below average. The market remains in an Uptrend Under Pressure with five distribution days. The index tested resistance at the 50-DMA (4,691), while immediate support still lies at its rising 100-DMA (4,449). The Caixin Services PMI stayed in expansion for the fifth straight month in September thanks to China’s successful control of COVID-19. Strong recovery of tourism and consumption in the Golden Week holiday also boosted market sentiment. Photovoltaic glass producers saw strong gains due to recent price hikes; ideas include Zhuzhou Kibing Group (ZKG.CN, 601636.CH, +5.3%) and Sinoma Sci & Tech (STC.CN, 002080.CH, +8.4%). The index is expected to stay range-bound before it breaks above key resistance at July’s high of 4,900 (+6.7%). We maintain a cautious view of the general market with consistently low daily turnover and an elevated number of distribution days. We expect the CSI to continue consolidating. Investors are advised to stay patient and wait for quality ideas to set up new bases. Continue to focus on stocks with high relative strength.
Global Focus Emerging
The CSI 300 gapped up and gained 2.0% in this one-day week after the holiday. Volume was higher but still below average. The market remains in an Uptrend Under Pressure with five distribution days. The index tested resistance at the 50-DMA (4,691), while immediate support still lies at its rising 100-DMA (4,449).
China A Shares
The CSI 300 rose 0.38% this week and remains in an Uptrend Under Pressure with the number of distribution days falling one to five. The A share market will be closed October 1‒8 for the national holiday. Trading activity remained lukewarm before the long holiday and volume was significantly less than average. The index kept trading below its 21-DMA (~4,658, +1.5%), which serves as immediate resistance, followed by the 50-DMA (~4,690, +2.1%). We look for the 100-DMA (~4,440, -3.3%) as the next level of support. China’s factory activity has maintained momentum following the shutdown and accelerates at a solid pace. The profits of industrial enterprises grew for a fourth consecutive month in August, rising 19.1% y/y after July’s increase of 19.6%. The official manufacturing PMI for September came in at 51.5, up from 51.0 in August and beating consensus of 51.2. We maintain a cautious view of the general market with consistently low daily turnover and elevated distribution days. We expect the CSI 300 to continue consolidating. Investors are advised to stay patient and wait for quality ideas to set up new bases. Continue to focus on stocks with high relative strength.
Global Focus Emerging
The CSI 300 rose 0.38% this week and remains in an Uptrend Under Pressure with the number of distribution days falling one to five. The A share market will be closed October 1‒8 for the national holiday. Trading activity remained lukewarm before the long holiday and volume was significantly less than average. The index kept trading below its 21- DMA (~4,658, +1.5%), which serves as immediate resistance, followed by the 50-DMA (~4,690, +2.1%). We look for the 100-DMA (~4,440, -3.3%) as the next level of support.
