Chinese indices are in vogue as investors conclude that shares are a better bet after weighing their options in the face of pricey property against low interest rates. The Shanghai Composite Index comfortably met measured targets, retracing more than half the losses from 2007's record. The "three white weekly soldiers" classic candle pattern after the break above the rectangle consolidation, coupled with bullish momentum and a gap higher last week, suggest further gains are likely. The rally should extend to the next measured target at 4,300 or 4,420 points, which is the 61 per cent retracement resistance. A surge above 4,500, which might also be possible, will make things very unsteady and we would consider reducing exposure. Other Asian bourses are currently at long-term resistance areas.
