The front-month futures contract on the Hang Seng China Enterprises Index saw bullish momentum kick in strongly last week, breaking above the top of the channel that had dominated since September. We had been watching for this sort of thing since the beginning of January when the tone changed with another strong rally from the 50 per cent retracement support level. Then the lagging line found support at the top of the Ichimoku cloud of 26 days earlier, creating another new interim base from where we rallied for the past four days. Interestingly, historical volatility remains subdued, suggesting the latest surge is sustainable. We expect a move to 10,800 points and possibly 2015’s high of 11,000 points.