Shanghai Stocks Falling Out of Favor As Central Bank Tightening Hard On Track

The Shanghai Composite Index had its worst day of the year Thursday, down 2.3%. After beginning a well-defined price uptrend that started in May 2017, Wednesday’s move could trigger sensitive momentum algorithms to exit long positions, particularly those formulas that focus on price channel patterns and downside deviation consistency models.  But beyond the algorithmic factors, there are fundamental concerns, notes a Deutsche Bank report. Some of these issues are long-term and involve slower moving central planning models while others are shorter term in basis.

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Regulation is a short-term concern of Chinese investors

Hong Kong stocks have been moving meaningful higher recently. The Hang Seng Index closed up 2.3% on the week, its fourth...