Chart of the day: Shenzhen spectacular
Having correctly called January’s low (the C leg of an A, B, C-type correction to 2016’s bull market) the Shenzhen A-shares index quickly reversed that section of the move. This week’s squeeze through a skinny little Ichimoku cloud was easy enough and, though the lagging line might find some resistance between 2,100 and 2,135 because of the cloud, further bullish progress is possible. This is because moving averages are now positive, the index managed a weekly close above the top of the weekly cloud, it is not overbought and observed volatility is subdued. Therefore over the coming month or so we shall pencil in a re-test of last year’s high at 2,243 with further gains to 2,300 likely.
Nicole Elliott is a technical analyst