Chart Book

Chart of the day: Strong support for H shares

PUBLISHED : Thursday, 11 May, 2017, 11:28pm
UPDATED : Thursday, 11 May, 2017, 11:28pm

As trend-line support kicked in, the Hang Seng China Enterprises Index contracts on Hong Kong’s Futures Exchange rebounded smartly, aided by the 50 per cent retracement support, thereby keeping consolidation since February in a downward-sloping rectangle. With a little luck, prices will be supported by the 38 per cent Fibonacci retracement level at 10,095 points and the lagging line by the cloud of 26 days ago. Fairly soon, we favour a break above Wednesday’s Ichimoku cloud and a retest of this year’s high at 10,700 points. Note that historical volatility has picked up over the past month, admittedly from a very low level, hinting that price moves could become bigger and more abrupt with a rally to 11,000 to 11,250 points highly likely.

Nicole Elliott is a technical analyst