Chart of the day: Shanghai Composite composed
The index of A and B shares on the Shanghai stock exchange rallied on Monday, in line with other major global markets. Technically what is more interesting is Friday’s close, which, despite volume being below the very long-term average, is this year’s highest weekly one. The chart pattern is still battling with horizontal resistace at 3,140 points, but the bullish underlying trend should see a break above here, possibly as early as this week. This is because moving averages are bullish again, the Ichimoku cloud continues its neat series of steps higher and the right-angled triangle is a consolidation pattern. Measured targets from this formation suggest a rush up to 3,265 points and possibly 3,340 points by the end of the year.
Nicole Elliott is a technical analyst