Chart of the day: On a bull run
A month ago, we warned readers that the front-month futures contract on the Hang Seng China Enterprises Index was about to break above the top of the triangle consolidation that had dominated for most of this year. It has done so with bursts higher interspersed with bouts of consolidation. This series of steps is expected to continue and should ensure that observed volatility remains close to the historic lows seen currently. All elements of the daily and weekly Ichimoku cloud chart system are bullish with little resistance on the horizon. A rally to 11,250 points would retrace half of the losses in 2015, and the triangle suggests an initial measured target at 11,390 points, with decent resistance closer to 12,150 points.
Nicole Elliott is a technical analyst