Shanghai Stock Exchange update

Evening all,

I have a short update on the Shanghai Stock Exchange (SSE) for today. In my last few posts on the SSE, I identified a potential huge symmetrical triangle on the chart. Over th last 2 months or so, the SSE came close to testing the bottom trendline that I have on the chart. It was worrisome seeing such a test. I certainly hope the triangle does not break to the downside. It is always best to hope the market is doing well. Anyways, I realised that I did move my trendline to accomodate the SSE’s recent move to about 2600. To be honest, if I were to stick with my tighter, old trendline, the recent move dow will be considered a break towards the downside from a symmetrical triangle.

When looking at huge patterns, I try to allow for some volatility. So I still see the SSE as trading in a symmetrical triangle. Once again, the SSE is still very near to the apex of the triangle – this tells me that the start of a huge move should be on the way. Let us continue to watch the SSE’s movement in the weeks ahead.

Now, I am sure quite a number of you may not agree with me on this humongous pattern (a potential one for now, actually) since there is a general belief that technical analysis does not hold water for long-term outooks. As far as my brand of technical analysis is concerned, I believe a pattern can be as huge as it wants to be. So, I will be looking at the chart of the SSE, bearing in mind the huge symmetrical triangle. I have seen huge patterns work out fantastic, and there are of course a few “bad apples” here and there. For small chart patterns, it is the same as well right? I see no difference in performance, thus I will take what I see on a chart, and trust that it will show me the general direction of the market.

All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

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