Chart of the day: Bullish signals for China’s A shares
Since Christmas, volume in the Shanghai A-Share Index has increased significantly although observed volatility remained subdued. This suggests new long positions have been established during the past three weeks of strong gains, with the top of the right-angled triangle acting as a platform for a sustained break above long-term Fibonacci 38 per cent retracement resistance. The third of the three consecutive “white soldiers” managed a weekly close at the highest point in more than two years, which is another bullish signal. Moving averages have helped the latest rally higher, while the weekly Ichimoku cloud and the long-term trend line underline the upwards trend. We continue to target further rallies and maintain our measured target at 3,750 points with a chance to overshoot.
Nicole Elliott is a technical analyst