Chart of the day: Shanghai in spotlight
As senior figures from the world’s top 20 countries gathered in Shanghai to discuss global economic trends, its stock market was under scrutiny, too. Thursday’s sudden slump kept the Shanghai Composite Index well within February’s established parameters, and the month’s relatively small range explains why volume for the period is the lowest since July 2014. This is a good thing, helping the market regain its composure and revert to more sustainable price action – and weekly ranges that were sustained from 2009 to 2014. However, with the index below Fibonacci retracement resistance and the large downward-sloping Ichimoku cloud, bearish pressure should ensure repeated testing of support between 2,500 and 2,650 points – and an extension to 2,265 points cannot be ruled out.
Nicole Elliott is a technical analyst