China A50 Index Expects Another Up Move

China's stock market rose after the National Day holiday. The close price of China A50 Index recorded a 2-month high.


China's stock market rose after the National Day holiday. The close price of China A50 Index recorded a 2-month high.

Last Friday, Caixin China Service PMI rose to 54.8 in September, better than the expectation of 54.3, from 54.0 in August. Key findings included: "Business activity and new orders both expand at quicker rates (...) Employment rises for second month in a row (...) Inflationary pressures weaken."

Investors should focus on September CPI (vs +1.9% on year expected) and PPI (vs -1.8% on year expected), which will be released on the Thursday.

From a technical point of view, the index broke above a declining trend line drawn from July's high, suggesting that the correction from July might be completed. Currently, the index prices returned the level above both 20-day and 50-day moving averages. Besides, the relative strength index rebounded from 40, indicating that the market market sentiment remains positive.

Bullish readers could set the support level at 15025, while the resistance levels would be located at 16485 and 17550.

Source: GAIN Capital, TradingView

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.