SSECI poised to test its downtrend line

SSECI gained 44 points (or, 2.22%) to close at 2030.48 today. This means that SSECI is poised to test its medium-term downtrend line, at the 2050 level as early as tomorrow. A breakout above 2050 would mean the end of the current downtrend. Two scenarios may happen, i.e. the SSECI will go sideway & a bottoming phase will take place. An alternative more bullish scenario may also happen, whereby the SSECI may commence immediately in an uptrend. The latter scenario is less likely given the weaknesses in China's main export market (i.e. the US) as well as the poor outlook of China's domestic economy (read: rising unemployment & fast-deflating property burble). Whatever the case, a breakout of a downtrend in SSECI is something to be welcomed, if it happened.


Chart: SSECI's daily chart as at November 14, 2008 (Source: Stockcharts.com)