Negatively impacted by fluctuations in global markets, the Shanghai Stock Index opened down by 40 points on 6 Nov 2008 and dropped further still as the day progressed, the ninth straight session of hovering near the 1,700-point level. Buy and sell volumes were essentially even. The blue chips showed no signs of marked volatility. Steel stocks jumped sharply at the opening, with bulk trades essentially the name of the game, while the brokerages rose despite a sharp fall for Haitong Securities. The two sectors were the only bright spots in an otherwise anemic market. Statistics show that institutional investors haven't been selling their holdings in large volumes. Instead, it appears that certain market stabilization funds are flowing into the market.

In theory, market stability in conjunction with weak performance cannot be maintained and Bollinger Bands on 60 min charts indicate that stocks are bound to move. In addition, 10 MA have created short-term market pressure. Were it not for newly-crafted preferential policies, the index would be sure to fall, with the recent low of 1,664 as an important watershed.


Source: Shanghai Securities News

Date: 7 Nov 2008

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