Daily Shanghai – Feb 18
Click charts to enlarge
Chart 1 – No real change in the technicals from last week. The MACD signal is still the main technical indicator for theShanghaitrend. The RSI is not overbought yet but is getting towards the upper line.
As said last week the upper Bollinger Band will continue to provide very good overhead resistance on a day by day basis.
But we should be careful as the MACD lines are starting to look like they are closing together. Keep a close eye as the closer the lines get the more you have to think about taking some profits on this year’s little upturn.
The broader market downturn since the beginning of last year is still in place however so don’t expect a sustained upturn anytime soon. The technicals still say take profits on upturns if you are playing this market shorter term.
Chart 2 – Having reached my long standing Fibonacci Projection target of 2088 I have redrawn a shorter term Fibonacci Retracement study on the latest price action.
As you can see the market has got through the 50 pct retracement after finding some resistance there.
Our 61.8 pct target is in sight and that could well be the turning point for this market. As the market hits that level look at the MACD and the RSI for indications that we could be in for a correction to this latest rally.
The Alexander Filter is saying beware as it is high as well.
Chart 3 – The Wall Street correlation is very volatile at the moment.
