Chart of the day: Limited upside seen for Shanghai stocks
No doubt there was great excitement in some sectors this week as the Shanghai Composite Index at last climbed above the 2,920-point level that capped late January and all February. The rally of the past fortnight has seen moving averages cross to bullish, allowing prices to probe inside the Ichimoku cloud. The questions are whether this is sustainable and if it has further to go. The answer is yes, but limited. The combination of Fibonacci retracement resistance at 3,037 points and the top of a massive, descending Ichimoku cloud (coinciding with the 50 per cent retracement resistance) at 3,160 points suggests the index will find it hard to push above here. Be careful.
Nicole Elliott is a technical analyst