China A50 Index Bullish Bias above 15380

China A50 Index: Bullish Bias above 15380

China A50 fell 1.8% on Monday as the global market drifted lower on the surge of coronavirus cases. Kweichow Moutai (600519), one of the heavy weight index stocks, reported that 3Q net income grew 6.7% on year to 11.2 billion yuan on revenue of 23.9 billion yuan, up 7.2%. The company dropped 4.2% after the release of its 3Q result.

Investors should focus on the official October manufacturing PMI (vs 51.3 expected) and non-manufacturing PMI (vs 56.1 expected), which will be released on Saturday.

From a technical point of view, the index remains holding above both 20-day and 50-day moving averages after breaking above its declining trend line drawn from July's top. The relative strength index is also supported by a rising trend line drawn from February.

Bullish readers could set the nearest support level at 15380, while resistance levels would be located at 16485 and 17550.

Source: GAIN Capital, TradingView

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