Chart of the day: CSI 300 ready for rally
The capitalisation-weighted index of the biggest 300 stocks in Shanghai and Shenzhen is not out of the woods yet, but it is certainly trying. This month, the index and its lagging line have managed a sustained break above 50 per cent retracement resistance after breaking above the top of the triangle consolidation that has dominated since mid-August. Volume has picked up over the past fortnight, and interestingly, observed volatility is almost at a record low, something many investors like. Last week’s price action is seen as consolidation at this year’s highest levels in preparation for another step up towards 61 per cent Fibonacci retracement resistance, which should hopefully be reached by the end of the year because moving averages and cloud support are supportive.
Nicole Elliott is a technical analyst