Chart of the day: Shanghai steel shines
Positions have been closed ahead of the end of the year (same as last year), and still the underlying tone to Shanghai steel rebar futures is bullish. Since gapping through trend-line resistance three weeks ago, the MACD and momentum have become more positive, and though overbought on the RSI, all other technical elements suggest more rallies. Adding considerable weight to this view is last week’s candle, a very strong hammer one, which managed to spurt higher from the trend line and just ahead of the nine-week moving average; this now becomes first key support. Follow-through this week is encouraging, and while we expect some hesitation at the psychological area of 3,000 yuan per tonne, pencil in another squeeze to 3,500 yuan.
Nicole Elliott is a technical analyst