Don't Ignore This Chart!

Shanghai Composite Breaks Support after Weak Retracement

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The Shanghai Composite ($SSEC) took a hit on Monday and closed below support from the April low. This move is reversing the counter-trend bounce and signaling a continuation of the bigger downtrend. $SSEC is in a big downtrend with lower lows and lower highs since the initial breakdown in June 2015. There was a counter-trend bounce in the second half of 2015 and the January breakdown reversed this four month upswing with a sharp decline in early January. After hitting a 52-week low in late January, the index bounced back with a move above 3000 in April. The move does not look that strong because it retraced a little over 38.2% of the prior decline. Moreover, the advance appears to be ending because the index closed at 2382 on Monday, which is below support.

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--Arthur Hill CMT

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Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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