- Shanghai Composite can fall to 2,500-2,600, DeMark says
- Analyst predicted selloff of Chinese stocks in Hong Kong
Chinese stocks may drop at least another 13 percent after losing 16 percent since the start of the year, said Tom DeMark, the chart-watcher who correctly predicted the selloff in the country’s equity market last year.
The Shanghai Composite Index can fall to the range between 2,500 and 2,600 from Wednesday’s close of 2976.69, said DeMark, founder of DeMark Analytics. The Hang Seng China Enterprises Index, which tracks Chinese stocks trading in Hong Kong, may decline to 7,480 -- or 6.7 percent below the last close, he said.
“We are a firm believer that markets bottom when the last seller has sold," DeMark said on Bloomberg Television Wednesday in New York. “It looks like” that the Hang Seng China gauge is “going lower,” he said. “We are pretty confident that the next level is 7,480.”
DeMark, 68, forecast on Jan. 5 that the Hang Seng benchmark may fall 15 percent to 7,933. The gauge closed at 8,015.44 Wednesday, or about 1 percent from his target.
Demark has advised hedge funds including George Soros’s Soros Fund Management and Leon Cooperman’s Omega Advisors. His Scottsdale, Arizona-based company makes money by charging traders for access to its indicators. It also sells subscriptions to the indicators on the Bloomberg Professional service.