Chart of the day: Shanghai’s star turn
A shares in Shanghai started the week with a bang, managing this year’s strongest close on good volume. This suggests this year’s gentle rally, mirrored by the slope of trend-line support, is on the move again and we have started building the next step higher in the series of halting upward lurches. Moving averages are bullish once again and note how the cloud’s lower edge stemmed September’s corrective dip. The lagging line has broken free from the candles of 26 days ago and has no obvious resistance levels to face. Though somewhat overbought, bullish momentum is strong and we expect an initial squeeze to retracement resistance at 3,300 points. Further out, our targets remain at 3,440 and maybe 3,600 points.
Nicole Elliott is a technical analyst