Chart of the day: Buying into the ChiNext index
This index of shares of the Growth Enterprise Board has been in retreat for two consecutive weeks. Several other Chinese or China-related indices also slipped suddenly last week and the European press has devoted quite a few column inches to it. In fact, ChiNext has been struggling to go any higher after the National Day holiday, caused by resistance from the long-term descending trend line and the falling Ichimoku cloud – which kicked off this fortnight’s losses. We believe this might be a buying opportunity because, unlike other China indices, it is closer to historical lows rather than highs. Watch to see if retracement support and/or the 26-week moving average provide support, looking to buy in the 1,740-1,780 points area.
Nicole Elliott is a technical analyst