The rally of late has driven prices on the Shanghai Composite (SSE) to a 52 week high, smashing through key resistance levels along the way. Much of this sudden interest in Chinese stocks is all thanks to the Chinese Government egging on Chinese Investors to jump on the bandwagon and throw their money at the stock market. Needless to say, this led to a huge spike in volume, and stock prices followed through.
Historically huge volume spikes have led to weak returns for the short and long term, for the medium term stocks returns were above average. Perhaps It’s time for a breather here at (1) as the SSE tests 38.2 fib level along with dual trend line resistance. Immediate daily support is at 3288.91. Above resistance at (1) Investors should look for a re-test of January 2018 highs which came in at 3591.70.
Historically huge volume spikes have led to weak returns for the short and long term, for the medium term stocks returns were above average. Perhaps It’s time for a breather here at (1) as the SSE tests 38.2 fib level along with dual trend line resistance. Immediate daily support is at 3288.91. Above resistance at (1) Investors should look for a re-test of January 2018 highs which came in at 3591.70.