Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Silver Market - 22nd Oct 20
Goldman Sachs Likes Silver; Trump Wants Even More Stimulus - 22nd Oct 20
Hacking Wall Street to Close the Wealth Gap - 22nd Oct 20
Natural Gas/UNG Stepping GAP Patterns Suggest Pending Upside Breakout - 22nd Oct 20 -
NVIDIA CANCELS RTX 3070 16b RTX 3080 20gb GPU's Due to GDDR6X Memory Supply Issues - 22nd Oct 20
Zafira B Leaking Water Under Car - 22nd Oct 20
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20
AMD is KILLING Intel as Ryzen Zen 3 Takes Gaming Crown, AMD Set to Achieve CPU Market Dominance - 13th Oct 20
Amazon Prime Day Real or Fake Sales to Get Rid of Dead Stock? - 13th Oct 20
Stock Market Short-term Top Expected - 13th Oct 20
Fun Stuff to Do with a Budgie or Parakeet, a Child's Best Pet Bird Friend - 13th Oct 20
Who Will Win the Race to Open a Casino in Japan? - 13th Oct 20
Fear Grips Stock Market Short-Sellers -- What to Make of It - 12th Oct 20
For Some Remote Workers, It Pays to Stay Home… If Home Stays Local - 12th Oct 20
A Big Move In Silver: Watch The Currency Markets - 12th Oct 20
Precious Metals and Commodities Comprehensive - 11th Oct 20
The Election Does Not Matter, Stick With Stock Winners Like Clean Energy - 11th Oct 20
Gold Stocks Are Cheap, But Not for Long - 11th Oct 20
Gold Miners Ready to Fall Further - 10th Oct 29
What Happens When the Stumble-Through Economy Stalls - 10th Oct 29
This Is What The Stock Market Is Saying About Trump’s Re-Election - 10th Oct 29
Here Is Everything You Must Know About Insolvency - 10th Oct 29
Sheffield Coronavirus Warning - UK Heading for Higher Covid-19 Infections than April Peak! - 10th Oct 29
Q2 Was Disastrous. But What’s Next for the US Economy – and Gold? - 9th Oct 20
Q4 Market Forecast: How to Invest in a World Awash in Debt - 9th Oct 20
A complete paradigm shift will make gold the generational trade - 9th Oct 20
Why You Should Look for Stocks Climbing Out of a “Big Base” - 9th Oct 20
UK Coronavirus Pandemic Wave 2 - Daily Covid-19 Positive Test Cases Forecast - 9th Oct 20
Ryzen ZEN 3: The Final Nail in Intel's Coffin! Cinebench Scores 5300x, 5600x, 5800x, 5900x 5950x - 9th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Where Is The Chinese Stocks Bear Market Likely To End?

Stock-Markets / Chinese Stock Market Jul 10, 2015 - 06:12 PM GMT

By: Austin_Galt

Stock-Markets

With the Chinese stock market, known as the Shanghai Stock Exchange Composite (SSEC) plunging in recent weeks, I thought I would analyse the technicals to determine where the final low to this bear market is likely to be.
Let’s begin by reviewing the more immediate picture with the weekly chart before zooming out and looking at the bigger picture with the monthly and yearly charts.


SSEC WEEKLY CHART

We can see the recent high was accompanied by a triple bearish divergence on the RSI. This often leads to a significant decline and that has been an understatement here. This indicator is now showing new lows which is bearish in that the final low is likely to show at least one bullish divergence.

The Stochastic and MACD indicators are both trending down and looking bearish indicating the likelihood of lower prices going forward.
However, there looks to be some short term relief in store right now. Why?

The Bollinger Bands show price is down at support from the lower band. The first time price hits this lower band often leads to a bounce back up to the middle band where resistance comes in again. This is what I favour happening here and that after price hits the middle band the downtrend will resume which sees price trade even lower.

Also, I have drawn a Fibonacci Fan from the June 2013 low to the January 2015 high. We can see the first little pullback after that January 2015 high found support at the 23.6% angle. Price looks to have once again found support at this angle. Once the bear rally high is in place then the downtrend should resume which sees price makes its way through these angles finding support and resistance along the way.
I have drawn a horizontal line denoting the January 2015 high at 3404. Old tops often provide support in the future and, hey presto, this week’s low at 3373 was right in the mix.

Finally, I have added moving averages with time periods of 100 (red) and 200 (black) which are in bullish order with the red line above the black line. This signifies an overall bullish condition despite the recent plunge. Something to keep in mind for those taking a longer term view!
Now let’s check out the bigger picture beginning with the monthly chart.

SSEC MONTHLY CHART

The Stochastic indicator is bearish while the MACD looks to be threatening a bearish crossover which I expect will occur once a little bear rally from here is over.

I have added some Fibonacci Fan angles using the 2008 low and 2007 high as starting points. Let’s run through them.

Firstly, the recent high was at resistance from the 88.6% angle down from the 2007 high.

We can see price just hit a low where the 50% angle up from the 2008 low intersects with the 76.4% angle down from the 2007 high. Nice.

As for final low targets, I am favouring price coming all the way back to the 88.6% angle up from the 2008 low. The 76.4% angle will be another to watch closely.

I have added Fibonacci retracement levels of the move up from 2008 low to 2015 high and I am favouring the final bear market low to get back to at least the 76.4% level at 2494 while the 88.6% level at 2065 may be a tad too far. Let’s see.

The moving averages I have added are interesting. They include averages with time periods of 50 (blue), 100 (red) and 200 (black). The black line is below both others indicating the long term position of the market to be bullish. Interestingly, the blue line is below the red line and the market exploded higher this year despite this bearish condition. It really is no surprise to see price come back to earth with the averages presented this way. But be under no illusion. These averages looks very bullish over the longer term and the move up this year should help to see the blue line get back up above the red line. Once all three averages are in bullish order, then the market should truly explode higher with conviction. All in good time.

SSEC YEARLY CHART

The yearly chart shows a massive bull market still in play with a pattern of higher highs and higher lows.
The Bollinger Bands show the recent high traded well above the upper band which is a common occurrence at solid tops. I now expect the final low to be back at support from the middle band which is currently around 2475.

The PSAR indicator now has a bullish bias after price busted the dots on the upside this year. As often happens, price then comes back to test the support given by this indicator with the dots now on the downside.

I have added Fibonacci retracement levels of the move down from the 2007 high to 2008 low. The recent high was at resistance from the 76.4% level and I suspect price will eventually bottom out down near the 11.8% level which stands at 2191.

The Stochastic indicator is bullish.

Summing up, while there looks to be further downside over the next year or so, the massive bull market remains solid which should see the upside resume in a couple of years.

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

Email - info@thevoodooanalyst.com 

My website is www.thevoodooanalyst.com 

© 2015 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Austin Galt Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules