Chart of the day: Hopes for sustained rally in Shenzhen stocks
Interim support in the 1,820 area in the Shenzhen A-Share Index helped produce May’s gentle rounded bottom – and what might be a new interim low point. Helped by a weaker yuan, we have seen a series of small steps higher last month while moving averages crossed to bullish. Last week’s break through trend-line resistance was important, evidenced by the rush up to the 50 per cent retracement level where the index and the lagging line settled on Monday. If we manage to break above 2,094 points, the rising Ichimoku cloud ought to get thicker and provide a more solid base for this recent rally, helping the index easily target the 61 per cent Fibonacci retracement level at 2,189 to 2,200.
Nicole Elliott is a technical analyst