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This website here uses powerful charting software AmiBroker for charting and indicators.
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Many of the answer is the additional lines and comments on the chart. See chart for more information.
China 000001.ss Shanghai Stock Exchange Composite Index Analysis
For Shanghai Stock Exchange Composite Index, China stock market index, it goes from down trend to up trend. It hit the peak in 2015 base on the six years data. In less than one month (June 15 to July 9), the index has fallen from the peak to level as start of January 2015. Have you ride the swing? So, remember all set up can fail. Price action has showed the market emotions, price action reflected the market.
Is this already final? Or more waves to come, and you are ready to ride the waves. Now look at the chart carefully, it is always good to look back for a few more years to get clue. From the chart when you connect the top and bottom, you realize that the market went through downtrend followed on uptrend. However, it will be great to have more data to support the uptrend.
Now remember, in finance market any policy will not just change, many of the policy will stay for a few months or years. In other worth, when the market trend, it will stay trend and not just sudden reversal. But the finance market will have the so called correction. Or we call it pull back or retracement. So, the current pull back is a correction. I do not know. If it is correction, then the market is very volatile. Trade with care.
If we analyse the chart using the H M Gartley reversal strategy, what do you think? See another chart with only 2015 data and see what we get.
Briefly, H M Gartley in May 1935 published a 446 pages book title Profits in the Stock Market discussed a chart pattern is now know as a reversal strategy, Gartley 222 Reversal Chart pattern.
August 11, 2015 China Shanghai Stock Exchange Composite Index
Another Scenario: China Shanghai Stock Exchange Composite Index
A level being test, and retest many times it becomes significant and must be very significant. In other words, the level will be surfaced again later. So, some level from resistance turn support, or support turn resistance.
Map H M Gartley chart pattern, you may figure out some trading plan.
August 11, 2015 China Shanghai Stock Exchange Composite Index
When you get a hang of it, try this analysis on other index that you are interested with more data.
Always draw lines on your chart and you many have more idea what next.
Thank you for visiting the website. Have fun!
Moses
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