Chart of the day: China’s CSI 300 Index breaks free?
Slowly and steadily, so that observed volatility is one standard deviation below its long-term mean, the China Securities Index of the top 300 shares on the Shanghai and Shenzhen exchanges has met our measured target at 3,925 points this week. More interestingly, it has done so by gapping higher, admittedly caused at least in part by China’s week-long National Day holiday. This suggests that perhaps many have missed much of the neat rally inside a trend channel, indicated by dwindling volumes over the past six months. Now that the lagging line has broken horizontal resistance, on a weekly close above 3,925 points, we would pencil in a sudden rush up to 4,100 points and probably 4,400 points.
Nicole Elliott is a technical analyst