Amid all the hype surrounding potential added fiscal stimulus from the US Federal Reserve, the Bank of Japan and the Bank of England, share prices in China suffered on Wednesday as worries that new regulatory rules might be introduced surfaced. Stalling suddenly shy of our target of 2,189 points and on the best volume since mid-March, the Shenzhen A-Share Index formed a massive Marabuzo candle, marking the end of the rally since May. All is not lost, however, as we have trend-line support, the 26-day moving average support and a rising Ichimoku cloud to cushion declines. Investors should use any small rallies as an opportunity to trim long positions as Wednesday’s candle can be seen as a sort of full stop for bulls.

Nicole Elliott is a technical analyst