A month ago, we wrote that the CSI 300 Index in China had more bullish momentum than might be expected and it was on track to rally to our second target at 4,400 points around the end of the year if it could hold above the 26-week moving average. Although this has not happened, the gauge still managed a weekly close above the top of the trend channel and hit the highest level since June 2015. Volume over the past month is above average while observed volatility remains subdued. We have slightly redrawn the very steep trend line and, while staying above this level, we hope the index will reach our target by the Lunar New Year.

Nicole Elliott is a technical analyst