The H-share index front-month futures contract comfortably met our first measured target at 10,100 points earlier this month, but since then progress has been more erratic. It broke immediate trend-line support, which has now turned into resistance, capping prices this week. Moves should be kept in perspective because moving averages are still bullish and observed volatility is about half of its peak early this year. We view the drop from 10,100 as a brief swoon and so long as the first Fibonacci retracement support at 9,425 points holds, another leg up towards 10,400 is possible. Note that the upward-sloping Ichimoku cloud is quite thick and ought to provide plenty of support.
