Shanghai Comp pushes higher towards the 2018 high at 3587 – Credit Suisse
|Shanghai Composite continues to push strongly higher and analysts at Credit Suisse maintain a bullish outlook, with the next important medium-term resistances at 3485/87 and then the 3587 2018 high.
Key quotes
“Shanghai Comp continued to surge higher on Wednesday, in line with its long list of supportive technical factors which keep us biased higher. This includes very strong momentum, with the daily RSI at the highest level since 2014, suggesting we may be moving into a ‘bubble’ phase similar to that 2014 blowup, as well as the surge in volume, which is also at the highest levels since 2014/15.”
“The market maintains three successive extremely bullish ‘Marubozu’ candlesticks and breaks above the January 2020 high at 3127 as well as the 3288 April 2019 high, which completed a multi-year basing structure.”
“We stay biased directly higher, with the next important resistance seen at the 38.2% retracement of the 2015/2019 fall at 3485/87. Given the size of the base though, a test of the 3587 high and eventually beyond here seems likely.”
“Near-term support moves higher to the 3394 lows and the risks stay directly higher whilst above here. Below here would suggest a correction back to the 3337/28 gap, which we would look to floor the market if reached.”
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