MCHI - Is China's Stock Market Poised For A Turnaround? Analyst Points To 3 Promising Signs Amid Policy Shifts | Benzinga
Chinese stocks have staged a notable recovery in recent sessions, buoyed by speculations of potential government interventions to bolster the struggling market. On Thursday, an analyst suggested that a bullish upswing might be on the horizon, basing his assessment on technical indicators and market data.
What Happened: Adam Turnquist, LPL’s Chief Technical Strategist, remarked, “Technical indicators are showing signs of a potential turnaround in Chinese equity markets.”
Positive Technical Trends: Turnquist pointed to the China Shanghai Composite Index, which has rebounded since the lows observed in March 2020 amid the onset of the COVID-19 pandemic. Supporting his observation, he highlighted the emergence of a doji candlestick pattern, coupled with a bullish divergence in the relative strength index and increased trading volume.
According to Turnquist, a breakout above the resistance level at 2,910 could mark a reversal in the downtrend, signaling the sustainability of the market’s recovery.
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Extreme Oversold Conditions: Turnquist noted that the percentage of stocks currently in oversold territory, indicated by an RSI reading below 30, along with the proportion of stocks hitting new 52-week lows, has surpassed the 70% threshold.
“Historically, readings of ...