Shanghai Market In Bullish Mode

Shanghai stock index is showing strength as it clears the 3000 resistance level. This break brings the upside to 3100 which is very near it’s closing on Friday.

Support appears to be at 2940. The phase chart shows clearly that the uptrend is still intact. Although the index moved into “Distribution” territory in late January 2011, the index managed to recover quickly and made its way back to “Bullish” phase. The phase chart has been in “Bullish” phase since 10 Feb 2011.

Shanghai Index Enters Bearish Phase

China market had a bad day yesterday. The Shanghai Index broke through its 200 day moving average, forming a long black candle. The move was triggered by the authority’s stance on controlling the property market in China. The market took the news negatively and the index closed below its 200 day moving average to end at 2980.

The phase chart has also moved to “Bearish” phase. The longer the index stays below its 200 day moving average, the more “Bearish” it gets. The best scenario for the bulls is for the index to move above its 200 day moving average in the next few trading session and for the index to move above 3200 level. However judging from yesterday’s performance, it is unlikely that such scenario will play out. It is best to take a defensive stance and to wait for a better opportunity to buy into this market.

Shanghai Index

China’s stock market advance into 2010 came to a halt since news that China’s authority is curbing lending for some banks. The measures taken may not be bad in the long run as it will prevent asset bubbles from getting out of hand. Taken in the broader context, it will create an environment that will allow equities an opportunity to move up in a more sustainable mode. However theoretical idea is not the one that brings in the money, only price action does. And the market has signaled that it has other ideas.

Technically, the Shanghai index has moved into “Warning” phase. It broke the longer term uptrend line and closed below the historical support level of 3000 on Friday. If the index rebounds from this level, it will most likely move into a sideway trading range before the market decides on its next move.

China Still In Bullish Phase

Shanghai Stock Index is following a cup and handle pattern that shows a long term upside breakout. The upside target is 3400 which is very near to the Friday’s closing level of 3317.

The phase chart is still showing an uptrend that re-established itself on 19 Oct 09 after dipping below its 50 day moving average.

The next resistance level is at 3400 level and it will take a lot of conviction from the bulls in order to close this level.

Shanghai Market

The Shanghai stock index has moved to “Warning” phase since 14 August 2009. It broke its 50 day moving average with ease on 14 August. The subsequent rebound from 2800 level met with strong resistance at the 3000 level.

It seems that the Chinese government is trying to prevent a new stock market bubble from forming. However, it does seem that the Chinese government also does not want the market to drop too much.

Nevertheless, weakness is beginning to show on the charts. The index has traded in “Warning” phase for 11 trading days now.

The next support level is at 2800 level. If the index breaks through this level, it will complete a lower high and lower low pattern. This will mean a possibility for the index to test its 200 day moving average.

Shanghai Stock Index

Shanghai stock market is approaching the critical 3000 level. The Shanghai market moved into “Bullish” phase since 10 Apr 09. There were corrections along the way up from 2444 to 2928. However corrections were shallow showing the strength of this rally.

No one knows exactly how far this rally will go but the bulls have the upper hand at this stage. Any pullback should see support at 2828 level, the previous pivot high.

China Market

Shanghai Market is among the better performers in 2009. The Shanghai composite index has managed to stay in “Recovery” mode since early Jan 2009.

The index is now sitting between the 50 day and 200 day moving average. The index climbed from a low of 1664 to hit a high of 2402 before pulling back to current levels. That is a gain of almost 45% in a span of about 5 months.

The slope 50 day moving average is turning positive which is a good sign. The 200 day moving average is still moving with a downward bias.

The index will have to go above 2359 in order to move to “Accumulation” phase. Let’s see what happen this week.

Have a great time trading the market and remember to follow the trend.

China Stock Market

Is China stock market on a recovery? Judging from the Shanghai Index performance, it looks likely that China stock market will stage a rebound given all the stimulus measures that the China Government has put in place.


The Shanghai Index is now very close to its 50 day moving average and on several occasions in Nov, the index actually went above its 50 day moving average.

The index seems to have bottomed out at 1664 which was the low set on 28 Oct 08.

Shanghai Market

The Shanghai Market tested a low of 2566 on 3 July before rebounding to 2952 on 10 July. The index closed at 2801 on Friday. It looks likely to test its 50 day moving average which is at 2953.
The index is still in “Bearish” trend. If it can gather enough momentum to break the 50 day moving average, it will move into “Recovery” mode. The index entered “Bearish” mode on10 Mar 08 and has stayed in this mode for 99 trading days.

Let’s see whether the Olympics fever can help to propel the market higher next week.

Shanghai Market Update

Shanghai market has corrected more than 50% from its peak of 6124 set in October 16 2007. The index closed at 2669 on Friday.

The index entered “Bearish” phase since 10 March 2008. The bulls tried to bring the index above its 50 day moving average in May but couldn’t gather enough strength to make a breakthrough.

The index is now clearly below its 50 and 200 day moving average.

Shanghai Market Update

Shanghai market was hammered 4 days in a row. It would have been 5 days in a row if not for public holiday on 9 Jun 08.

The market closed at 2868 points, down 461 points for the week.

The phase chart showed that the index moved into “Bearish” mode on 10 Mar 08 and the market has been facing selling pressure ever since.

The rebound from the 22 Apr 08 low of 2990 faced a big resistance at the 50 day moving average and the index has now fallen below critical support.


The market has stayed in Bearish mode for about 99 trading days. With the Dow rising 165 points on Friday, Shanghai market should see buyers on Monday. But the trend is still favouring the Bears.

Shanghai Market Update

The Shanghai Composite Index drop 398 points to end the week at 3094. That is a 12% drop in 1 week.




The phase chart is showing weakness since 10 Mar 08 when the index dipped into “Bearish” phase. It has stayed in “Bearish” mode for 29 trading days. For this round of bear attack the index has dropped from 4300 to 3094, a whopping 1206 points or 28%. The bulls must be feeling the heat right now.

The last time the index fell into “Bearish” phase was in 27 Sep 05. The market stayed in “Bearish” phase till 9 Dec 05, a total of 47 trading days.

The chart doesn’t look good for Shanghai. Hope it can find some support at 3000.

Shanghai Market Updates

Shanghai Index (Symbol: 000001) is not showing a good picture.

Date	Close	Phase	50 DMA	200 DMA
1/2/2008	5272.810059	3	5257.520508	4546.415527
1/3/2008	5319.859863	3	5248.450684	4558.19043
1/4/2008	5361.569824	3	5238.819336	4570.467285
1/7/2008	5393.339844	3	5235.438965	4582.675293
1/8/2008	5386.529785	3	5231.376465	4594.955566
1/9/2008	5435.810059	3	5225.133301	4607.062988
1/10/2008	5456.540039	3	5216.319824	4619.18457
1/11/2008	5484.680176	3	5206.918457	4631.320801
1/14/2008	5497.899902	3	5198.590332	4643.45459
1/15/2008	5443.790039	3	5191.909668	4655.301758
1/16/2008	5290.609863	3	5185.032715	4666.140137
1/17/2008	5151.629883	-1	5177.334473	4676.20459
1/18/2008	5180.509766	3	5168.90918	4686.241699
1/21/2008	4914.439941	-1	5160.597656	4694.82666
1/22/2008	4559.75	-2	5145.481934	4701.705078
1/23/2008	4703.049805	-2	5135.788086	4708.958008
1/24/2008	4717.72998	-1	5126.97998	4716.089844
1/25/2008	4761.689941	-1	5113.960449	4723.44043
1/28/2008	4419.290039	-2	5095.041016	4728.941406
1/29/2008	4457.939941	-2	5077.874512	4734.613281
1/30/2008	4417.850098	-2	5060.835449	4739.708008
1/31/2008	4383.390137	-2	5042.629395	4744.403809
2/1/2008	4320.77002	-2	5024.759766	4748.53125
2/4/2008	4672.169922	-2	5018.520508	4754.236816
2/5/2008	4599.700195	-2	5009.871582	4759.644531
2/13/2008	4490.720215	-2	5000.509277	4764.115723
2/14/2008	4552.319824	-2	4994.333496	4768.818359
2/15/2008	4497.129883	-2	4988.208496	4773.241699
2/19/2008	4664.290039	-2	4981.427734	4779.318359
2/20/2008	4567.029785	-2	4975.33252	4784.232422
2/21/2008	4527.180176	-2	4968.503906	4788.313965
2/22/2008	4370.290039	-2	4957.591797	4791.562988
2/25/2008	4192.529785	-2	4940.588867	4793.805664
2/26/2008	4238.180176	-2	4924.651367	4796.081055
2/27/2008	4334.049805	-2	4909.49707	4798.95166
2/28/2008	4299.509766	-2	4892.248535	4801.243652
2/29/2008	4348.540039	-2	4875.718262	4803.236328
3/3/2008	4438.27002	-2	4862.573242	4805.362305
3/4/2008	4335.450195	-2	4850.121094	4806.791016
3/5/2008	4292.649902	-2	4835.816406	4808.145996
3/6/2008	4360.990234	-2	4825.500488	4809.71875
3/7/2008	4300.52002	-2	4814.787598	4811.725098
3/10/2008	4146.299805	-3	4798.87793	4812.526367
3/11/2008	4165.879883	-3	4781.324707	4813.114258
3/12/2008	4070.120117	-3	4760.691406	4813.313965
3/13/2008	3971.26001	-3	4735.431641	4812.808594
3/14/2008	3962.669922	-3	4710.661133	4812.069824
3/17/2008	3820.050049	-3	4682.395508	4810.301758
3/18/2008	3668.899902	-3	4649.595703	4807.890625
3/19/2008	3761.600098	-3	4619.596191	4805.799805
3/20/2008	3804.050049	-3	4590.220703	4803.459473
3/21/2008	3796.580078	-3	4559.755371	4800.767578
3/24/2008	3626.189941	-3	4525.047852	4798.632813

It went into "Bearish" phase on 10 Mar 08. It looks to be just the beginning. If you are looking to buy into China market, I think you can wait a while. Seems like the "Bear" party just started.

Shanghai Market Updates

Shanghai Index moved into "Bear" phase on 10 Mar 08. Picture is not looking good.

With Dow crashing on Friday due to Bear Stearns news, Monday is going to be a down day again.

Hang Seng Index went into "Bear" phase on 6 Mar 08. Few days earlier than the Shanghai Index.

All signs point to further downside.

Shanghai Market Analysis

Date	Close	Phase	50 DMA	200 DMA
1/2/2008	5272.810059	3	5257.520508	4546.415527
1/3/2008	5319.859863	3	5248.450684	4558.19043
1/4/2008	5361.569824	3	5238.819336	4570.467285
1/7/2008	5393.339844	3	5235.438965	4582.675293
1/8/2008	5386.529785	3	5231.376465	4594.955566
1/9/2008	5435.810059	3	5225.133301	4607.062988
1/10/2008	5456.540039	3	5216.319824	4619.18457
1/11/2008	5484.680176	3	5206.918457	4631.320801
1/14/2008	5497.899902	3	5198.590332	4643.45459
1/15/2008	5443.790039	3	5191.909668	4655.301758
1/16/2008	5290.609863	3	5185.032715	4666.140137
1/17/2008	5151.629883	-1	5177.334473	4676.20459
1/18/2008	5180.509766	3	5168.90918	4686.241699
1/21/2008	4914.439941	-1	5160.597656	4694.82666
1/22/2008	4559.75	-2	5145.481934	4701.705078
1/23/2008	4703.049805	-2	5135.788086	4708.958008
1/24/2008	4717.72998	-1	5126.97998	4716.089844
1/25/2008	4761.689941	-1	5113.960449	4723.44043
1/28/2008	4419.290039	-2	5095.041016	4728.941406
1/29/2008	4457.939941	-2	5077.874512	4734.613281
1/30/2008	4417.850098	-2	5060.835449	4739.708008
1/31/2008	4383.390137	-2	5042.629395	4744.403809
2/1/2008	4320.77002	-2	5024.759766	4748.53125
2/4/2008	4672.169922	-2	5018.520508	4754.236816
2/5/2008	4599.700195	-2	5009.871582	4759.644531
2/13/2008	4490.720215	-2	5000.509277	4764.115723
2/14/2008	4552.319824	-2	4994.333496	4768.818359
2/15/2008	4497.129883	-2	4988.208496	4773.241699
2/19/2008	4664.290039	-2	4981.427734	4779.318359
2/20/2008	4567.029785	-2	4975.33252	4784.232422
2/21/2008	4527.180176	-2	4968.503906	4788.313965
2/22/2008	4370.290039	-2	4957.591797	4791.562988

In the beginning of 2008, the Shanghai Composite Index was still showing bullish signs. However warning signs started to appear and Jan 28 2008, the index entered into "Distribution Phase". Now the index is clearly below the 50 and 200 DMA. Once the 50 DMA cuts below 200 DMA, we will be entering the "Bearish Phase".

Maybe the coming Olympics will give a boost to the China Stock Market but once the Olympic effect is over, we may be in for a rude awakening.

Therefore better play safe.