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Chart of the day: Shenzhen A shares on bull run

PUBLISHED : Friday, 21 October, 2016, 12:02am
UPDATED : Friday, 21 October, 2016, 12:02am

As we pointed out a month ago, on the third attempt at 2,140 points (horizontal resistance), there was a chance the Shenzhen A-Share Index might break higher. Tuesday saw its first daily close above this important chart level and, even though only a marginal break, the combination of a big bullish candle supported by the nine-day moving average, which in turn has crossed to bullish against the 26-day one, hints at the start of the next leg higher. Steady trend-line support taken from February’s low mirrors the slope of the rising Ichimoku cloud, while consolidation since July is in a right-angled triangle. Taken from the height of this pattern, our measured targets lie at 2,245 and 2,300 points.

Nicole Elliott is a technical analyst