The index of the top 300 A shares traded on the Shanghai and Shenzhen exchanges is drifting slowly lower, as expected and like other mainland ones. The lower edge of the Ichimoku cloud provided support last week and could continue to do so as it runs horizontally at 3,060 points. However, if we break below this level, it will become resistance to any attempt at a rally. Therefore, we continue to expect a slow drift in the index towards the psychological 3,000-point level, then probably March’s low at 2,820 points. Note that this is not just a feature of the Chinese stock market as small signs of weakness can be seen on all too many global indices.
