DISCLAIMER!!! This is the first time I ever looked at the Shanghai Index
China is not showing any bearish signs yet but I can't feel bad for them. China has had a GREAT year in the market. Even with this pullback, if you invested in the Chinese market around this time last year, you would have still doubled your money. If you invested at the beginning of the year you would still be up over 10%. That is pretty darn good. The only REAL losers are people that invested after April Fool's Day (pun definitely intended).
That being said, its time to get real! The Shangai index had a major drop and is showing no signs of hope. Currently, the first sign of hope would be a close over 4223. Even this would only be a glimmer and I would be skeptical. I would say a close over 4687 to be the real turning point and that is a big RISK ratio right now. I will keep an eye on this and adjust these key levels as necessary.
The blue lines on the chart were support lines and the red line is currently the BEST resistance line. I got these lines from the weekly and monthly chart. Currently the blue lines are irrelevent but dropping below 4832 was a MAJOR indicator that something was wrong.
I am interested to hear what you may think.
Comments
octradr
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4223 couldn't hold. It looks as if the bears will run wild! 7/29
octradr
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Well it finally closed over 4223 yesterday. Lets see if the momentum can hold. 7/24
octradr
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It has tested the 4223 zone twice and hasn't been able to close over it. It's still too soon to say the downward trend will continue, but I would say the optimism of a rebound is dying out with each day that passes. Make sure your stops are set. 7/15
elp
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Looking at the Nikkie, it's made a huge W pattern. Doesn't mean price has to go up. Can easily fail. Nonetheless, a breakout of current highs would think there could be more upside. Would expect corrections along the way with an upside bias. This could be setting up for a huge Asian rally into the next 5-6 +++ years?
octradr
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Time will tell. It has been very bullish the last couple of years.
elp
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All markets for that matter. The Nikkie and usdjpy are both at major resistance. A correction if price can not clearly take out highs and hold highs as support could be not to fat away.
elp
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I don't trade asia. However, i do look at them since world markets seem to move in tandem. The SI is at June 2007 correction lows before making a huge rally into 2007 highs. Both have similar rallies % wise leading up to the June correction. Both periods had a correction of -20% or more with the current correction at -34% If price has memory, with the Chinese govenment only allowing up in their stock market, could be what it takes to make history rhyme twice. At least for the next 6 months it could go up. If at 2007 highs in six months from now. I would believe most if not all major share holders would be selling hand over fist. theguardian.com/world/2015/jul/09/china-bans-major-shareholders-from-selling-their-stakes-for-next-six-months
elp
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Clean chart to see price.
octradr
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This monthly chart scares me a little more than the shorter terms because the true major support is at 1749. I am sure it will turn around but until that is confirmed I would be wary about dumping money into it. I think you are right in assuming a big selloff will occur if the price reaches the old highs.
octradr
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The next trading session will show us if their is a glimmer of hope coming soon. 7/9