I discussed the fight for Shanghai Composite between a 7-year historical level and a 7-month trend line previously. This was the chart we looked at last week.
Shanghai Composite weekly chart 2009 – 06 January 2016 | Source: Investing.com
I still think that there are more losses – this was reinforced by Monday’s market breaking action. I don’t have high opinion of trend lines – horizontal levels are more reliable – so I think this trend line will break. That low of 2850 (August 2015, ‘x’ marks the spot) should be tested as well and it is a more interesting level.
So here we are.
Shanghai Composite Monthly chart 2007 – 15 Jan 2016 | Source: Investing.com
In my opinion, 2850 is now inevitable.
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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.
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