Bulls gathered (much) required strength...

China SSE Composite(2001) Near Term Trend: Positive

In the last review I said "Near term trend is positive;expect a swift up move towards next crucial level of 2.2k; stop is placed at 1740-1780". Since then the index consolidated within the range of 1850-2000, without disturbing the bullish setup. See the inlaid daily chart, the index has retraced the previous down move (from 2050 to 1838) of 9 days in just "three" trading sessions (today's high is 2055). This faster retracement of the previous leg indicates a much required "strength" in the bulls camp, to head higher. On the monthly chart , as anticipated, the index has given upward break to the falling parallel channel, drawn from recent all time high(Oct07). This is an indication of change. Therefore for now, we see some support coming for the medium term. Move stop to 1840- on close basis-(from existing 1740). On the upside, as advised earlier, we maintain our near term target at 2.2/2.3k.

Dragaon retaliating....indeed. Now 2.2k is crucial!

China-SSE Composite(1927) Near term trend: Positive

I argued in favor of pending "bullish reversal" in Shanghai Index, in the last review dt 23 Oct, with anticipating strong support near 1740-1780, based on observations noted on "monthly" chart. The index consolidated almost exactly there (tolerance of 2-3%) in the support zone, before retaliating. Remember that the so-called 'fundamental' good new flown into the market much later, but prices have already made a 'base' near the historic support zone. Now, expect continuation of the swift up move, with 'stop' placed at 1740-1780. On the upside the upper end of the parallel channel is the 'trend' deciding factor, for the current month the value of the highest point is around 2157(say 2.2k); good if it breaks, in this month itself, else "trading" range between 2.1k-1.7k till the year end.

China : will the dragon retaliate...?

China- SSE Composite (1875):

Near term Trend : Bearish (Pending reversal) The bull run started in Oct 2005(1067) has ended in Oct 2007(6124). Since then the SSE index felled in a perfect falling parallel channel. See the inlaid monthly chart with respective support/resistance level(s) indicated by arrows.

Before turning up in 2005, the index faced consistent resistance near 1740-1780 mark in 2001,2002 & 2004 (see down arrows). Technically, important resistance zone (on the way up/down) turns into "support" zone, once price moves above/below it. In that sense, now, this 1740-1780 zone should act as a support zone for SSE index on its way down; which is what happened, so far, with lowest down tick of 1802 on 18th Sep 08. Second, is it just a coincidence that we are again in the month of "Oct" with 70% value erosion, in just 12 months? I think we should give "some" respect to this time cycle. Observe that (on the daily chart) the SSE index went way ahead of global leader Dow Jones, on its way down. On 18th Sep Dow was 11019 & Shanghai index was 1895 (low of the day 1802, lowest tick so far in 08). Since then Dow is down over 22% (close basis) & SSE 1.1%. Looks pretty confusing? It could be a) SSE index, as usual, outperformed the Dow on its way down (which is what happening since top) and waiting for a fresh down move, when the difference between two is narrowed OR b) The SSE index has shown lot of resilience despite of global turmoil in the current month. Considering all I am betting on option 'b'. Once the index moves above 2.2k,the things will turn bright (as explained in above para).....& on the downside 1740-1780 is the stop. Lets see......!