The Shanghai Composite has pushed sharply higher, in contrast to other global equity markets which remain in near-term consolidation phases, breaking above resistance at 2953/57 with scope for resistance at 3008/10, according to strategists at Credit Suisse.
Key quotes
“The market has broken out from its recent range above the 2957 high, above which we see resistance next at 2983, which is the 78.6% retracement of the 2020 fall. Thereafter, the much more important confirmed downtrend from the 2018 high is seen at 3008/11, where we would have high confidence in the market finding a ceiling to define the top end of the broader range. Above would start to suggest we are potentially dealing with a more bullish setup, however, this is not our base case.”
“Near-term support moves to the 2957 breakout point, then 2920/19, which ideally holds to maintain the near term upside pressure. More important support remains at the recent price gap and the important uptrend from March at 2876/72, then the bottom of this gap at 2852. Below these levels would mark a more important breakdown.”
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