Breaking to the highest level since Jan 2016
The US major indices are higher today with the S&P up 0.1% and the Nasdaq up around 0.4%. For the last 5 days those indices are up 0.7% and 1.23% respectively.
However looking at China's Shanghai composite index, that index broke above a ceiling at 3300 on Friday and is continued to race higher in trading today (up 0.93% today). The index over the last 5 trading days has advanced 2.30% - making it one of the biggest gainers over that time period. Year to date the index is up 8.35%.
Technically, looking at the daily chart, a catalyst for a move has been higher highs since May. Also two corrective moves stalled right at the 50 day MA (see chart above). That gave traders a bullish clue for more upside. Buyers were leaning and the price moved higher.
The index has also been able to move above the 50% of the move down from the December 2015 high. That 50% level came in at 3161.765. The last week, has been able to get above and move away from the 61.8 of the same move down at 3285.14.
The index is also above the 100 and 200 day MAs.
All of that is contributing to a more bullish technical bias for the index.
Taking a broader view from the weekly chart (see chart below), the index has moved clear of the 50, 100 and 200 week MAs (the index has closed above all three MA since June 30th week). The last time the price was above all three MAs (prior to the break) was back in August of 2015. Note, however, the index is well off the 2015 spike high at 5174.42.
Room to roam?
Sure. The technicals are certainly pointing that way with the 3607 level a higher target. That is the 38.2% of move down from the 2015 high. It would represent another 7.2% higher from today's close.
