Last post suggested that the bullish triangle in the shanghai composite was still intact as long as prices stay above 2890. Today, SSEC closed at 2868, officially in dodgy territory. Before we go on to ponder what that means, here's a snapshot of the hourly chart for the very-short-term picture:
At the bottom of the chart, note the RSI divergence, which indicates that a rebound is likely at this point, towards resistance in the 3020 area. Also note the declining down volume, and the completion of 5 waves on this leg.
Medium-term
So the ultimate question: is the triangle scenario still valid? Based on all the indicators i'm watching, it is highly likely that it still is! We may have to modify the triangle count to a much broader one, implying a longer sideways path, and a rally towards year-end. A break below 2700 will cancel this option. After watching the next few sessions, i'll explain the broader triangle count in the next post.
Stay tuned, and all the best!
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