Shanghai Composite - Daily - Getting closer to the line

Trade Alert

The index is now very close to its medium-term downside resistance line, taken from the peak of the 29th of January. We will continue to observe the activity, because until that line is broken and we see the Shanghai Comp. closing above 2792, we cannot say that the index will continue pushing higher from here. We need to get that confirmation first, before we could aim for the 2916 level, or even the 3040 zone, marked near the lowest point of May.

If the downside resistance line continues to hold, then the index could drop back down to recent lows. But for to start examining lower levels again, we would need to see a break below the 2640 zone, marked by the lows seen on Tuesday.

Don't forget your SL.