Chart of the day: Positive signals for ChiNext index
The ChiNext Price Index disappointed bitterly in early July but appears to have kicked itself back into gear by the middle of the month. Moving averages have once again crossed to bullish, while volume and observed volatility are at their highest this year. Monday’s strong rally, similar in size to that on July 27, saw a test of trend-line resistance while the Ichimoku cloud, unlike in early July, is small and thin – and therefore should be easier to break. It also closed above first Fibonacci resistance at 1,771 points. This week, it is likely to retrace half of the most recent losses before a retest of the highs in May and June, which line up with 61.8 per cent retracement resistance.
Nicole Elliott is a technical analyst