May Day pause a chance to reassess Shanghai market
Labour Day holidays all over the world give traders and investors a chance to review, reassess and plan tactics for the next four to six months. Again consensus opinion has been outwitted, the Fed not raising rates as quickly or by as much as expected, the US dollar not strengthening, and commodity prices not falling through the floor. Chinese equities have been steadier than many and look set to continue this pattern. The Shanghai Composite Index should, on dwindling volume, hold below resistance at 3,160 and above support (and this year’s low) at 2,638. Weekly and monthly closes below here would force us to rethink, suggesting that the retreat from last year’s massive spike high has further to run – slowly.
Nicole Elliott is a technical analyst