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Technical analysis for Shanghai composite, the index reached the first target of the weekly bullish wave, the 1.272 FIB extension at 3725, and started a consolidation. This consolidation formed an ascending triangle on the weekly chart. If the Shanghai composite index breaks above the ascending triangle and 3725, that will resume the bullish run. The first target for this potential bullish break-out is the 1.618 FIB extension on the weekly chart at 4015. The second target is the 0.618 FIB retracement on the monthly chart at 4135, and the third target is the 2.272 FIB extension on the weekly chart at 4570, which is the 0.786 FIB retracement on the monthly chart.
On the other hand, if the Shanghai composite index breaks below the ascending triangle on the weekly chart, that will send the index lower. The first target of this bearish break is the low on the weekly chart at 3448. A break below 3448 opens the door for further declines toward first, the 0.618 FIB retracement at 3385. The second target is the support at 3300-3315, which is 0.382 FIB retracement and an important level that many institutions and investors will watch for buying opportunities.
Weekly chart:
Monthly chart:
