CHINA BULLS: THE ODDS MAY BE SHIFTING IN YOUR FAVOR
We’ve been bearish on China’s stock market for what seems like forever. But it may be time to start getting bullish…
A great way to keep tabs on the “China situation” is by monitoring the “Dow Industrials of China,” the Shanghai Composite Index.[ad#Google Adsense 336×280-IA]This index tracks the biggest, most important companies in China.
Over the past few years, Chinese stocks have been getting hammered.
The Shanghai Index is down 33% from its 2009 peak, and almost 20% from its 2012 watermark high near 2,500.
But the index broke out to the upside of a bullish “falling-wedge pattern” last week, and it’s in the process of testing the former resistance line of that pattern right now.
If the line holds as support and the Shanghai Index bounces from current levels, we may be on the verge of an important, long-term reversal for the Chinese stock market.
– Jeff Clark
Source: Market Notes