The Shenzhen A-Share Index’s attempt last week to rally through the psychological 2,000-point level did not end well, which was not entirely surprising as it felt the full force of resistance from the 200-day moving average, the 50 per cent retracement and the long-term trend line. The weekly candle takes the form of a spinning top (like the wooden child’s toy), which, following the previous week’s dragonfly doji (denoting instability), suggests the recent bounce may have run out of steam. This suggests that over the next two or three weeks, we are more likely to drift back down towards 1,700 to 1,750 points than break above 2,100, reinforcing our longer-term idea that this index has moved into a consolidation phase.
