Chart of the day: Shanghai shares face mixed outlook
Losses on the Shanghai Composite Index over the past four weeks may feel large but they are manageable in the bigger scheme of things. Triggered by the drop through long-term trend-line support, the decline turned moving averages from steadily bullish to mixed at the moment. With a little luck, they will be supported by the flat-topped weekly Ichimoku cloud. More interesting is last week’s hammer candle, which is rather like the one in late January that marked the low for that corrective bout. This time, it coincides with the bottom of a rising cloud, so is once again likely to mark an interim low. The salient feature on this chart though is the prolonged struggle the market has had with retracement resistance at 3,285 points.
Nicole Elliott is a technical analyst