Shanghai A share index weekly update (2013-08-16) – False breakout before wave 5 ?

Shanghai A share index has made some clear break out to the upside this week but finally close under the mentioned resistance (2180). Week high was 2302 but closed at 2165, barely above the week low 2151. Trading volume apparently increased.

 

In candlestick, this week is an inverted hammer with very long upper shadow (bearish), indicating strong selling force at the upper side. With the sign of increased trading volume, it could be the start of the sub wave 5 (downward) mentioned here for few weeks. And though the level 2260 was once broken up (probably due to the huge fat finger mistake done by one China securities firm), the market closed far below that level. If the index break down and close below this week’s low (2151), we could further assume that wave 5 down has begun.

 

 

shia2013-08-16_week

Week Chart

 

 

shia2013-08-16_day

Day Chart

 

Outlook Next week

Bearish with following support and resistances

 

Support

2151 – Week low

2057 – 3 week’s low

 

Resistance

2180 – 38.2% retracement of wave 5-i to wave 5-iii,

2260 – wave C-5-1 bottom, close above this to void the bear wave model

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s