Chart of the day: Nervousness prevails in Shanghai A shares
There have been tiny little moves in Shanghai A shares so far this month, and yet volume has increased steadily and volatility is back up to the highest levels of the past three months. This is probably related to nervousness as we trade around the pivotal chart level at 3,050 points. Monday’s sudden slide reflects the fact that moving averages remain bearish, the lagging line hit resistance from the cloud 26 days ago and we are currently struggling with a modest Ichimoku cloud. We expect a retest of May’s support area at around 2,910 points, maybe as early as this week, plus some hesitation here. After that, this year’s low at 2,760 points will act as a magnet, dragging the index down a little further.
Nicole Elliott is a technical analyst