Chart of the day: Shenzhen stocks set for rebound
Both volume and historical volatility in the Shenzhen A-Share Index picked up this week, and though a fraction of the peaks seen in the past two years, it underlines renewed interest in this asset class. From being oversold late last month, the index appears to have turned the corner with stochastics now bullish and a rounded-bottom (against long-term trend-line support) chart pattern in the making. This happens to be taking place at a cluster of Fibonacci retracement support levels at between 1,820 and 1,900 points. Therefore, we feel this year’s drift lower is almost over and we ought to prepare for slow but steady gains in the second half. A realistic first target would be 2,100 points.
Nicole Elliott is a technical analyst