China A50 I am still looking at you.
I posted previously on 30 March 2017.
There are 3 charts I want to share about China A50. At first glance, it is coming to the apex of a great big triangle over a duration of more than a year – that’s pretty significant. Trend suggests that we should see an upside break of the triangle as a kind of continuation. However the bigger picture suggests that there is a big resistance on top.
I put it together to see the picture this way.
- Strong resistance from 10478 – 10564 which has to beaten before China A50 can proceed higher.
- This zone is significant because of it’s duration.
- Trend is in favour of more gains but again subject to condition of resistance.
- The whole pattern was a symmetrical triangle so we had a whole year of consolidation. Yet this whole year of consolidation has not recovered half of what it lost in 2015 following the June 2015 burst.
I suspect that we are closer to some kind of support-finding action (to fall) first before it can rise further.
Based on this chart below,
- China A50 has broken the big triangle discussed in previous post.
- China A50 has broken a supporting trend line from June 2016 – April this year.
- Last week’s price action suggests trend line has turned form support to resistance.
- China A50 is still supported by blue lines, could turn into a sideway channel as easily as it could go lower.
Keep an eye on Chinese banks, finance companies because China A50 is a whopping 69% financial.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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