Over the last year Shanghai’s A share index has been dominated by trend-line support and low but steady bullish momentum. The relatively sharp drop from our target at 3,440 has been stemmed by channel support just ahead of the long-term trend-line, helped by a rising Ichimoku cloud whose angle mirrors the other lines. The gentle rally is on the move again, the lagging-line rallying ahead of cloud support, continuing the series of halting upward lurches. Monday’s progress was capped by the 26-day moving average, and the market must still deal with resistance from the top of the cloud, but probably after the Lunar New Year holiday expect a re-test of 3,440.

Nicole Elliott is a technical analyst