The front-month futures contract on the H-share index eventually broke out of the right-angled triangle that had dominated since mid-April. Mid-July’s successful break above the flat-topped daily Ichimoku cloud then saw the lagging line break above the top of the thick cloud of 26 days ago, confirming the bullish moving-average cross. The subsequent rectangle consolidation means the contract is not overbought while keeping momentum marginally bullish. Therefore, we feel another step higher is likely this month, hopefully on slightly better volume, particularly as and when we break above April’s high of 9,362 points. Measured targets from the height and width of the rectangle are 9,425 and 9,575 points.
