Chart of the day: Bullish signs for H shares
The front-month futures contract for the Hang Sang China Enterprises Index had a fabulous day on Friday, forming a large, bullish Marabuzo candle that was the same size as the one on July 11, which kicked off the latest leg up. Note how the top of triangle consolidation and retracement support helped push the index higher after three consecutive days of decline in early August. Note also how the candles of 26 days ago set off a rush higher in the lagging line. On Monday, the index met our first measured target at 11,400 points with a flourish, becoming overbought in the process. However, because both momentum and the Ichimoku moving averages are bullish, we favour a push to 11,850 points over the coming month.
Nicole Elliott is a technical analyst