Chart of the day: Third time lucky for Shanghai stocks
After a prolonged struggle with Fibonacci retracement resistance at 3,285 points, it was third time lucky for the Shanghai Composite Index. The gauge smashed through this level last week and closed well above it, marking a continuation to the bullish move we flagged in mid-May. Helped by a rising nine-week moving average and a rising Ichimoku cloud, the lagging line also broke through the huge cloud of 26 weeks ago. In September, we expect a rush up to the next two, and final, Fibonacci retracement resistance levels at 3,418 and 3,460 points, with a potential extra burst to the psychological 3,600-point level and the high of 3,675 points in December 2015. This might coincide with the top of the trend channel, depending on the speed of the rally.
Nicole Elliott is a technical analyst