Chart of the day: Steel rebar remains relevant

Resistance at our first upside target at 4,500 yuan (US$682) per tonne proved greater than we had thought and, coupled with China’s National Day holiday, saw the market retreat. The correction was similar in size but slower than the one at the start of the second quarter; it has now formed another new interim low. This continues the series of higher lows as the market rallies in neat steps since the beginning of 2016. The latest rally has been helped by the lagging line which bounced from support of the candles and, going forward, these should help take prices back to 4,500 and then on to our second target which remains at 4,625. Most aspects of the Ichimoku cloud chart support this view.

Nicole Elliott is a technical analyst