FxWirePro: Sell SGX FTSE China A50 Future targeting 15 percent decline

SGX China A50 future is a future contract on largest 50 A share companies by full market capitalization of the securities listed in Shanghai and Shenzhen stock exchanges. A CFD (Contract for difference) instrument is also available on SGX A50 future; that is CHN50 offered by FXCM.

The index (CHN50) has been declining after topping around 14900 area in January this year and currently trading at 12550 area. Our calculations suggest that there is a strong possibility that the index would decline further as the ongoing trade dispute between the United States and China is very likely to weigh on the Chinese shares, which usually enjoys the support of the Chinese government but lack reforms like the recent tax cuts and reforms passed in the United States. The rising interest cost is also likely to weigh on the index.

Trade idea:

Sell CHN50 at the current rate of 12550 with a stop loss around 13100 area targeting 10500.