Measured targets based on the inverted head-and-shoulders chart pattern have been met comfortably by the H-share index, which even exceeded them as we had warned. Now what? The fact that volume was almost at this year’s best level on Wednesday as we broke above the psychological 9,000-point level, coupled with the most overbought reading on the RSI for almost a year, send out a warning. Despite momentum being clearly bullish for the first time this month, the fact that we have retraced half of the decline since October means the rally is mature. The 50 per cent level also coincides with chart support in September and December; what was support becomes horizontal resistance. Watch for topping signs.
