China A50 breaks trend line, pulls back, resisted

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.

  1. Strong resistance from 10478 – 10564 which has to beaten before China A50 can proceed higher.
  2. This zone is significant because of it’s duration.
  3. Trend is in favour of more gains but again subject to condition of resistance.
  4. 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.

 

Backstory here.

Based on this chart below,

  1. China A50 has broken the big triangle discussed in previous post.
  2. China A50 has broken a supporting trend line from June 2016 – April this year.
  3. Last week’s price action suggests trend line has turned form support to resistance.
  4. China A50 is still supported by blue lines, could turn into a sideway channel as easily as it could go lower.
China A50 daily chart April 2016 - present

China A50 daily chart April 2016 – present

Keep an eye on Chinese banks, finance companies because China A50 is a whopping 69% financial.

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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.   Soh's Twitter account @sohtionghum was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015 by MahiFX.   Disclaimer notice: "I do not have a financial advisor's license. I am not qualified by any regulator to give financial advice. I do not know you the reader. Your investment means and motive may be different from me. My posts here are based on observations and meant for education. I am not responsible for for any consequence from your actions."
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