Chart of the day: Steady support for H shares
Front-month futures prices on the Hang Seng China Enterprises Index have once again been supported by the trend line taken from the low in February 2016. Though rising only very gently, the Ichimoku cloud support also helped nudge prices higher this week, mirroring support provided to the lagging line 26 days ago. All of the above is mildly bullish and ought to set up for a test of trend-line and triangle resistance – a consolidation pattern that has dominated since the middle of March. Interestingly, historical volatility has picked up marginally since June 14, though remaining clearly below its 20 per cent long-term mean. Volume also rose on Monday, suggesting renewed interest in the bullish potential for this index.
Nicole Elliott is a technical analyst