Chart of the day: Shenzhen set to rise
The Shenzhen A-Share Index has been stuck below horizontal resistance at 2,140 points since early July, and some might be getting bored with it. Since then, the market has consolidated in a flat-topped right-angled triangle, a pattern that underlines the bullish tone to this index. All aspects of the Ichimoku cloud system continue to suggest further gains and trend-line support, taken from February’s low, remains as steady and at the same angle as it has been all along. Recent price action has held above the steadily rising cloud, with candles of 26 days ago supporting the lagging line. We feel that a retest of 2,140 points is due by the end of the month with a break higher on a third attempt a possibility.
Nicole Elliott is a technical analyst