Chart of the day: H shares’ textbook tactics
The front-month futures contract on the H-share index comfortably met our measured targets from the rectangle consolidation. On rising volume, as we had hoped, the second half of August saw another bout of consolidation inside a flag chart pattern. This alternation between strong rallies and sideways moves is classic step-like price action in a bull market. Moving averages are still bullish and the contract is no longer overbought on the RSI. Although the top edge of the Ichimoku cloud begins to dip, hopefully the 26-day moving average and the trend-line support will push it up in another sudden burst. Measured targets based on the height of the flag are 10,100 and 10,400 points.
Nicole Elliott is a technical analyst