Chart Book

Chart of the day: Onwards and upwards for China Enterprises Index

PUBLISHED : Tuesday, 17 October, 2017, 11:42pm
UPDATED : Tuesday, 17 October, 2017, 11:42pm

The futures contract on Hong Kong’s Hang Seng China Enterprises Index has comfortably reached our first measured target at 11,390 points and started this week on an upbeat note. Although it is almost overbought, the steady bullish momentum since July hints at another rally before the end of the year. We would pencil in 12,150 and maybe 12,700 points, which is the midpoint between the record high in 2007 and the interim low in 2008. So, we are not talking about an index that is ridiculously expensive. Because the current rally that started in February 2016 has been based on steady volumes, with price action moving up in steps, observed volatility remains below its long-term mean regression, which is another point in favour of this index.

Nicole Elliott is a technical analyst