News Failure and Favorable Winds for Chinese StocksFundamentals & Sentiment
CN50A:
- PBOC has officially ramped up support for the stock market, relending facility launched
- Couldn't hold lower after bad Industrial profits release
USD:
- De-escalation sentiment after the attack on Iran
Technical & Other
Setup: S(RTF)
Setup timeframe: 4h
Trigger: 1h
Medium-term: Sideways
Long-term: Up
Min target: Local high
Stop loss: 0.9%
Position size: 0.5 of the normal Risk Unit
Buy Limit
Chinaa50
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CHINA A50 Death Cross to push it lower but buy opportunity lurksThe China A50 index (CN50) completed yesterday a 1D Death Cross following a convincing rejection on the 1D MA200 (orange trend-line) and that should extend the Channel Down to a new Lower Low.
Technically it appears to far to be in good symmetry with the Falling Wedge's previous Bearish Leg, that found a temporary bottom after a -14.76% decline and rebounded to the 0.618 Fibonacci retracement level.
As a result, despite the current weakness, we expect this last push to stop around 11100 - 11000 and then rebound to 12100 (0.618 Fib).
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China A50: Potential swing trade longThe China A50 rose over 20% from it January low to earn its 'technical bull market' status. Yet prices couldn't quite reach 13k before embarking on a -7% retracement over the next four weeks. Yet with it showing early signs of stability above support zones, perhaps a swing low is near - if not in place already.
The daily chart shows a bullish engulfing candle on high volume, which respected the 38.2% Fibonacci level and 12k handle. The engulfing day also closed back above the monthly S1 pivot point.
Bulls could seek dips within the engulfing day's range with a stop beneath its low, or 12k for a more conservative entry. 12.5k or the monthly pivot point make an appealing upside target for bulls.
CHINA A50 on the 1W MA100 after 2.5 years! Ultimate Bull test!When we looked at the China A50 index (CN50) last year (December 21 2023, see chart below), we got the best buy entry possible on more than 1 year span:
Our long-term Target at the time of 13000 is almost hit but it now time to re-evaluate our perspective as the index not only hit the top of its almost 2-year Falling Wedge but more importantly made contact with the 1W MA100 (green trend-line) for the first time in almost 2.5 years (since the week of December 28 2021).
This is the ultimate test for the Chinese market. A closing above that Resistance cluster, will turn us bullish again, targeting the 1W MA200 (orange trend-line) at 14250. Until that closing happens, we turn bearish on the medium-term, targeting 11850 (just above the 0.5 Fibonacci retracement level).
It has to be mentioned that the 1W RSI has already made a bullish break-out above its 3-year Lower Highs trend-line, potentially hinting finally towards a long-term trend change to bullish.
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CHINA A50: Make or break time on the 1W MA50.The China A50 index (CN50) is giving us excellent return on our bullish position since our last post (December 21 2023, see chart below), even though it hasn't reached the 13000 Target:
It is time to take profits on this amazing rally as the index has hit and got rejected twice already on the 1W MA50 (blue trend-line). This is a sign of weak momentum and as long as it fails to close a 1W candle above the 1W MA50, we are bearish towards the 0.382 Fibonacci at 11700. If it does manage to close above it though, we will take the loss and buy instead, targeting the 1W MA100 (green trend-line) at 12700.
Note that the 1W MA100 has been intact as a Resistance since the week of December 28 2021, so if broken the index will enter a new long-term Bull Cycle. Notice also the Lower Highs on the RSI. This week we may have a break-out, the first sign of an upcoming long-term Bull Cycle.
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CHINA A50: Time to buy Chinese stocks.The China A50 index (CN50) has been trading within a Falling Wedge pattern since July 2022 and more recently in particular hasn't been able to break above the 1D MA50 (blue trend-line) since September 08. That bearish sentiment may be coming to an end as the 1D MACD is about to form a new Bullish Cross in the same order as the November 01 2022 Low.
This could be the bottom (Lower Low) of the Falling Wedge and the start of the new Bullish Leg towards the 0.786 Fibonacci retracement level, as the January 28 2023 High did. We are now buyers on this index, targeting the top of the Falling Wedge at 13000.
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CHINA A50: Chinese stocks are the buy opportunity of a decade.The China A50 index (CN50) is trading within a Falling Wedge pattern and on the larger picture a Channel Up with its Higher Highs being on June 09 2015 and February 16 2021. The price is now closer to the Channel Up bottom and the pricing of a new long-term Higher Low (bottom), which already makes it a great buy opportunity. Of course the most optimal level to enter would be as close to the bottom as possible, especially of the 1W RSI makes one more Higher Low on its Triangle.
We have seen the very same 1W RSI Triangle in November 2012 - February 2014, when the index was within a similar Falling Wedge. The same RSI Bullish Divergence (Higher Lows against the price's Lower Lows) eventually caused the March 18 2014 rebound. This is why the most optimal level to buy would be on the (current) RSI Higher Lows. If that isn't materialized, we will enter when the 1D MA100 (green trend-line) breaks, which will be a bullish break-out confirmation. In either case, our long-term target is the 2.382 Fibonacci extension level at 23000.
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CHINA A50: Bullish signal approaching.The China A50 index reached today the LH trendline of the August 1st top and turned neutral on the 1D technical outlook (RSI = 50.831, MACD = -120.000, ADX = 25.828). The 1D MACD Bullish Cross that was just formed on such a low level, makes the third time this year but we need further confirmation to buy for an extension as the March 23rd Bullish Cross failed to push the index past the 0.382 Fibonacci level.
Consequently, if the price closes a 1D candle over the 0.382 Fibonacci, which at the same time will be a 1D MA50 breakout, we will go long and target the 0.618 Fibonacci level (TP = 12,800), which will be a technical LH of the 10 month Channel Down.
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China A50 holds its ground despite weak sentimentAU wages came in weak, The RBA hinted that they think they're done tightening in the minutes, The PBOC cut rates (again) and a slew of data from China once again misses the mark. And all in a 30-minute period! I think we’re fast approaching a phase where bets will be on for another round of stimulus. The China A50 is holding its ground above 12,600 and AUD/USD has managed to hold above yesterday’s YTD low despite the weak data. There’s a floor under these prices, and any rumours of stimulus could potentially light the bullish match for these markets to bounce.
Economic data from China continues to disappoint, with retail sales, industrial production and fixed-asset investment data all missing the mark today. This follows on from disappointing trade figures for Q3 with imports and exports contracting at a much faster pace than feared, and loan demand falling to its lowest level since 2009.
Yet somehow, the China A50 is still holding above the 12,400 base it formed in Q2 (despite negative headlines) before falling on news of stimulus. Are we about to witness a similar scenario? Perhaps.
The PBOC announced that they have cut rates for a second month in three, a move not expected by the majority of economists. But it does suggest there is some panic, and with that comes hopes of more stimulus. If a market can’t go lower on bad news, it may not take much ‘good’ news to help it rally.
A bullish hammer formed on the daily chart on Monday and prices are holding above its low despite the negative sentiment. We therefore see the potential for a rally to at least 13k, either on hopes of stimulus (or confirmation of it).
China A50 holds 12400 with conviction. Bullish breakout pending?The China A50 trades within a bearish channel on the daily chart, although we strongly suspect it wants to break out of it to the upside.
If you look at the steady stream of weak data coming out of China over the past few months, why is the China A50 not breaking to new lows? In fact, each time the market has pulled back to the 12,400 area since early June buyers have stepped in. And they returned in force yesterday to produce a strong bullish engulfing candle at support.
Bulls could either wait for a break of the 12,857 high to confirm breakout. But if confident that some sort of ‘plunge protection team’ is defending the 12,400 level, any pullback towards it may prove to be a gift for bulls who are anticipating a countertrend breakout.
CHINA50 CN50 Short Bears Remain in ControLike Hong Kong 50(See the Idea here
bearish start to the week, with hawkish central banks and growth fears continue weighing on investor sentiment ahead of a busy week.
The theme remained the same, with investor jitters over the economic outlook weighing on investor sentiment.
There were no economic indicators from the region to change the mood.
Market Overview
It was a bearish morning session for the Asian markets. The ASX 200 led the way down, with the Hang Seng and the Nikkei also struggling.
The Asian equity markets tracked the US equity markets into the red, with fears of central banks sending the global economy into a recession weighing. Hawkish Fed Chair Powell testimony continued to resonate this morning. Last week’s Bank of England 50-basis point interest rate hike was a reminder of central bank commitments to tame inflation.
Despite softer US private sector PMI numbers on Friday, the markets are still betting on a Fed 25-basis point interest rate hike in July. According to the CME FedWatch Tool, the probability of a 25-basis point July Fed rate hike stood at 71.9% versus 74.4% one week ago.
Significantly, the chances of the Fed lifting rates to 5.75% in September stood at 11.5%, up from 8.9% one week earlier.
Bank stocks also had a mixed morning. HSBC Holdings PLC and The Industrial and Commercial Bank of China (HK:1398) saw losses of 0.33% and 0.24%, respectively, while China Construction Bank (HK: 0939) rose by 0.40%.
Strategy Bearish Short
RSI confirming permanent trend continuation
Bulltraps can be used to sell more and stronger
Trendlines shold be used in 2 ways:
bearish breakout of the trendlines should be sed to new bearish enries or position sizing only.
Bullish breakouts should be used as profit taking or trading the 2nd wave only.
Bullish breakouts are often traps.
CHINA A50 POTENTIAL REVERSAL TO THE UPSIDE.China stocks eased 0.01%, while Hong Kong's Hang Seng Index
HSI opened up 0.3%. China's sputtering post-COVID-19 economic recovery has weighed on stocks, with investors pinning their hopes on more policy stimulus as weak manufacturing and exports hurt the broader outlook this year.
china A50 (bottom here)hello dear trader
this price action of (chinaA50)
FTSE China A50 Index is a stock market index by FTSE Group, the components were chosen from Shanghai Stock Exchange and Shenzhen Stock Exchange, which issue A-share; B-share were not included. Other similar product were CSI 300 Index by China Securities Index Company and "Dow Jones China 88 Index" by S&P Dow Jones Indices
price can reverse in this area because : PRZ fibou 0.618 + priceaction level
good luck
Looking for CN50 rallies.CHN50 - 24h expiry
Buying pressure from 12916 resulted in prices rejecting the dip.
The current move higher is expected to continue.
The bias is still for lower levels and we look for any gains to be limited.
We therefore, prefer to fade into the rally with a tight stop in anticipation of a move back lower.
Further downside is expected although we prefer to sell into rallies close to the 13355 level.
We look to Sell at 13355 (stop at 13455)
Our profit targets will be 13105 and 13055
Resistance: 13660 / 14440 / 15080
Support: 12790 / 12400 / 11845
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The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
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Buying CN50 at current swing low.CHN50 - 24h expiry - We look to Buy at 13261 (stop at 13101)
Although the bears are in control, the stalling negative momentum indicates a turnaround is possible.
This is positive for short term sentiment and we look to set longs at good risk/reward levels for a further correction higher.
Trading within a Bearish Channel formation.
Our expectation now is for this swing lower to continue towards the bottom of the trend channel, to complete a correction before buyers return.
Although the anticipated move higher is corrective, it does offer ample risk/reward today.
Our profit targets will be 13661 and 13741
Resistance: 13570 / 14235 / 15080
Support: 13110 / 12645 / 12070
Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
Buying CN50 at trend of higher lows.CHN50 - 24h expiry - We look to Buy at 13540 (stop at 13470)
Although the bears are in control, the stalling negative momentum indicates a turnaround is possible.
The trend of higher lows is located at 13455.
This is positive for short term sentiment and we look to set longs at good risk/reward levels for a further correction higher.
The hourly chart technicals suggests further downside before the uptrend returns.
We look to buy dips.
Our profit targets will be 13740 and 14235
Resistance: 14235 / 15080 / 16150
Support: 13110 / 12645 / 12070
Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
ChinaA50 - Bias for higher levels.CHN50 - Intraday - We look to Buy at 12540 (stop at 12380)
Selling pressure from 13067 resulted in all the initial daily gains being overturned. The current move lower is expected to continue. The bias is still for higher levels and we look for any dips to be limited. We, therefore, prefer to fade into the dip with a tight stop in anticipation of a move back higher.
Our profit targets will be 13005 and 13140
Resistance: 13140 / 13615 / 14200
Support: 12660 / 12075 / 11120
Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
China A50 set for a corrective bounce?The China A50 has rallied over 13% since the October low and has since retraced to the 61.8% Fibonacci level. An elongated bullish Pinbar formed yesterday which shows strong demand around the bullish engulfing candle and marking a potential swing low within a bullish retracement channel. We are now looking for a break above 12,350 to assume bullish continuation and a move back towards the 13,000 resistance zone.
This could be the final move of a 3-wave correction, before it reverts to its bearish trend.
China A50 index to fall below the 500-week moving average?China A50 index ( CN50 ), a measure of the Chinese onshore market that keeps track of 50 of the biggest Chinese A-share companies listed on the Shenzhen and Shanghai stock exchanges, broke a major upward trend that had been in place since 2016.
The technical picture sees the A50 index currently dominated by a descending channel pattern, having fallen 42% from its peak in February 2021, with prices now approaching a remarkable 500-week moving average.
Given the slowdown in the Chinese economy caused by the government's Zero covid policy, the downward trend in Chinese stocks has been ongoing for a while. However, the most recent sell-off has been triggered by a crumbling confidence among foreign investors as a result of Xi Jinping's reelection as president for a third term and a leadership reshuffle within the Politburo Standing Committee during the 20th National Congress.
The A50 index may not have reached its bottom yet, if the Zero-Covid policy and growing doubts about the new policymakers' plans for the country's economic future continue to dampen Chinese growth prospects. Even though the weekly RSI is beginning to exhibit extremely oversold conditions, which is extremely unusual for this market and hasn't happened since August 2011, bears still have total control over the index. But, given the wild price swings of the past few days, some technical and short-term price bounces could still happen.
The psychological 11,000 point level, which is down 7% from here, and the 10,200 point level, which was the low of January 2019 (down 14% from here), provide the next significant supports. The A50 will have dropped 50% from its peak if it reaches levels from January 2019, which might encourage some dip buying there.