China Stocks - Revisited

Just about one month ago (July 8), we looked at the Chinese stock markets (SSE Comp. in particular and using some of the tools we have on Excalibur Pro, we suggested that the market was poised to give back some of its gains. And it did just that, dropping 5.6% over the next week or so.

Since that time, the SSE Comp has drifted back and forth and has clawed back most of the those losses as it is only off 1.4% since we penned that post.

So, where does it go from here? The political risk remains high as U.S. President Trump has ramped up his criticism of China and has threatened to ban some Chinese companies from operating in the U.S. (WeChat and TikTok in particular.)

But some of the technical and momentum signals suggest that if the political risk dissipates, that the SSE Composite is ready to be on the move again. Markov signals are strongly bullish, the MACD line is approaching the signal line (a buy signal) and the RSI has slipped to a reasonable level (around 59).