Chart of the day: CSI 300 approaches carefully
Two months ago, we wrote that the China Securities Index of the top 300 A shares on the Shanghai and Shenzhen stock exchanges was set to rally, with a second measured target at 3,800 points. It stalled with a shooting star weekly candle just under this level but has subsequently recovered very quickly and is no longer overbought. Volume this summer has been consistently good and bullish momentum is at its strongest this year. Because of this, we feel the index is ready to test very major long-term resistance between 3,800 and 3,925 points. A weekly close above this level would constitute an important break, and we would then pencil in a sudden rush up to 4,100 and probably 4,400 points.
Nicole Elliott is a technical analyst