Chart of the day: CSI 300 meets target
Sooner than expected the China Securities Index of the top 300 shares on both the Shanghai and Shenzhen exchanges almost met our target at 4,100 points, bashing up against the top of the long-term trend channel in the process. Futures volume has picked up since late October as investors realise that the index is higher than it has been in more than two years. Bullish momentum has increased and a steeper trend line has captured the rate of ascent since May. Based on the relative strength index the market is overbought and would therefore benefit from a few weeks of consolidation. If this does not happen, then our more optimistic target at 4,400 comes into play and should be hit quite soon.
Nicole Elliott is a technical analyst