Chart of the day: Chemical reaction
China's equity market seems to march to its own beat, unaffected by the global growth concerns that have undermined indices elsewhere across the globe. Indeed, Shanghai's resilience - nearing a two-year high - appears at odds with heightened investor concerns that are in part related to fears over the country's economic outlook. While the rest of the world is opting for defensives, cyclicals remain favoured for China. Absolute Strategy Research's proprietary sentiment indicators suggest that a revival in Chinese chemicals plays from oversold may have further upside. A move above the 90 relative level would clear the way to retest 2014 highs.
David McBain is a technical strategist at Absolute Strategy Research