Asian Markets - Update - Shanghai - September 18, 2018

publication date: Sep 18, 2018

Cerundolo Investment Research    

CIR Asian Markets  

Volume 2, Issue 5
September 18, 2018

 


Items of Interest:

For a number of months, we have been cautious the China Shanghai Composite Index and have highlighted its initial Money Flow Unit-2 (MFU-2) target area of 2600. The index is just 1.5% shy of that level, and we want to point out that the MFU-2 target typically results in a strong counter-trend move and, in this case, the odds are there for a short-term rally. Our initial thought is highlighted on the daily chart below where there is potential for a 4% upside move to the upper end of the regression trend channel. If the momentum is strong enough to get a two-week close above 2800, then the odds are there for a move up to the 3000 area which is a 38% retracement from the January high. For those that are nibble, we would suggest playing the long side with a stop just under the recent low. Also, the long-term target at MFU-3 of 2000 comes into play once we see a monthly close below 2600.
Daily and monthly charts below.

 

 

 

 

 

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