Chart of the day: Rally hopes for Chinese stocks
The CSI 300 index, which tracks the top 300 shares traded on the Shanghai and Shenzhen stock exchanges in China, hit this year’s highest point this week, meeting our January forecast for a rally to 3,500 points. Gapping higher through bullish moving averages on Wednesday, it is currently grappling with Fibonacci retracement resistance at 3,504 points. Daily and weekly Ichimoku clouds and averages are supportive. Since it is not overbought and momentum has been bullish since mid-March, with volume and observed volatility having both picked up over the period, we feel a break higher is imminent. Our first target will be last year’s high at 3,583 points. A lot later on, we expect a retest of 2015’s highs around 3,900 points.
Nicole Elliott is a technical analyst