Chart of the day: Slow but steady in Shanghai
The Shanghai Composite Index has been inching higher since the start of this year. While still trading under Fibonacci 61 per cent retracement resistance at 3285 – which capped last year – we favour a break above here within the next month or so. This is because moving averages are steadily bullish, the trend line has neatly supported the bull run for 12 months, and prices are now holding above the top of the weekly Ichimoku cloud. The lagging line has had no trouble penetrating the massive cloud of 26 weeks ago and volume remains steady. Therefore expect a rally to 3,400 to 3,460 where a little hesitation might take place; then up again to 3,675 where it will probably struggle.
Nicole Elliott is a technical analyst