Chart of the day: Slow but steady

As we wrote in June, we ought to prepare for slow but steady gains in the Shenzhen A-Share Index during the second half of this year and a realistic first target would be 2,100 points. We are not there yet, but with volume picking up steadily over the summer and observed volatility still subdued, there is every chance that we will get there this month. Monday’s close above the psychological 2,000-point level is significant and it is the strongest one since April. Subsequent consolidation is in the shape of a pennant, which is a bullish chart pattern. All aspects of the Ichimoku cloud system are bullish and the lagging line has had a big boost, supported by the top of the big cloud of 26 days ago.

Nicole Elliott is a technical analyst