Chart of the day: A class in Shanghai
Continuing our look at Chinese indices, because three of August’s top 10 performers among Bloomberg’s “primary” equity ones were the Asian giant’s, Shanghai’s A-share index has been consolidating neatly against support at 3,200 points – which in classic textbook style had been resistance in July. Monday’s small hammer candle against this chart level, which neatly coincides with trend line support from June’s low, ought to nudge prices back up towards 3,400 points. Ten, 50-, and 100-day moving averages are now neatly aligned in a clear bullish mode, the shortest one picking up on Tuesday’s close. The index is not overbought on the relative strength index as it was mid-August and, depending on momentum, a rally to 3,600 is possible.
Nicole Elliott is a technical analyst