Chart of the day: Shanghai A shares behaving
Just as we had thought, Shanghai’s A shares have been consolidating above 2,750 to 2,800 points for more than a month now and both volume and volatility have subsided. Because momentum is neutral, as is the relative strength index, we shall pencil in another week or two of sideways movement above current established support. The 50-day moving average lines up with February’s high at 3,070 points and this week’s lower edge of the Ichimoku cloud, a combination that will probably act as an upside barrier. For now, we will ignore the Ichimoku moving averages, which have crossed to bullish. Trend followers might find this outlook frustrating, but remember that steady money can be made when trading established ranges.
Nicole Elliott is a technical analyst