Above is the daily chart of Shanghai Stock Exchange Composite (.SSEC). The chart tells us that probably the China market has turned its direction, and could lead Hong Kong market to turn as well.
The composite has been sliding along the green down-trend line since April 2011, and it could never cross above this line.
However, yesterday SSEC finally made its way above the line, with a big white candle. This suggests that the few-month bearish trend may have come to an end.
Volume surged as well, further confirming the break out. But it takes two more days to make sure it is not a false break out.
MACD and its EMA shows a bullish cross signal too. But we have to be extremely careful of zig-saw patterns which appears several times in past few months.
So next, how much would it go? By using a fibonacci retracement, SSEC probably stops at around 50%, which is around 2800.
So this is hopefully a temporary stop for such a bearish market.
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