Trading of Chinese equities around the globe gave mixed signals ahead the bell on Monday. The Shanghai Composite Index <.SSEC> advanced 1.18% to 3,124.66 points on Monday, easily bypassing the 3,000 resistance level last week. But trading in Hong Kong was muted and reflected global economic worries that recovery in the U.S. may take longer than expected. The Hang Seng Index <.HSI>, benchmark for Hong Kong, fell 223.99 points or 1.23% to 17,979.41 in an erratic trading.
Index futures point to a lower open ahead the bell with traders still moaning over the weak job reports from last week. Chinese stocks listed on American exchanges are subject to market sentiment and thus are expected to perform poorly on Monday with some excepcion. CChina Life (601628.SS: Quote, Profile , Research) (LFC: Quote, Profile , Research) (2628.HK: Quote, Profile , Research) advanced both in Shanghai and in Hong Kong on Monday following a Credit Suisse upgrade citing improved outlook.
Looking at Chinese ADRs from a technical point of view the picture is not rosy. Most China stocks have lost momentum, not a single ADR is overbought. Most are trading below 20-DMA and 50-DMA, a sure sign of lost short term momentum. But with RSI in the red, the outlook for the week is different from Monday's.