The Chinese plunge protection team looks to have restored some slight confidence, bolstered by the loan prime rate cut yesterday here. That is helping to see domestic stocks stick with the recent rebound with the Shanghai Composite closing up 1.0% today and the CSI 300 index finishing up 1.4% on the day. While hopeful, both indices are now running up against their respective 100-day moving averages (red line):
And that might present a technical challenge for buyers to seek a further rebound from hereon. There is the caveat that trading conditions are largely momentum-based right now though. But it is best not to completely rule out any technical repercussions.
Despite the rebound, I'm not personally convinced of a major turnaround in fortunes on the Chinese economy. That being said, the temptation of bargain hunting is a good enough reason to go with in making sense of the latest bounce.
