Shanghai's SSECI appears to have made a top on October 16th last year when it recorded a high of 6124. In the past 3 months, SSECI has drifted lower. It had put in a lower' high' on January 14th & it had put in a lower 'low' last week. On the chart below, I have highlighted the 'highs' as 'A & A1' and the 'lows' as 'B & B1'. I would consider this a short-term downtrend as compared to the long-term uptrend that stretches back to March 2006.
This immediate horizontal support the SSECI is at 4400 & the next support at 3400. The long-term uptrend line support is at 3450-3500.
Chart: SSECI's 2-year chart up to January 25th (from Yahoo Finance)A sharp drop in the SSECI ahead of the lunar new year next week may seriously impact the Hong Kong market. As many small players have invested in CWs of Hong Kong-listed stocks, our market may also be affected.
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