Optimism over US-China trade negotiation gave Chinese stocks a strong boost today. The Shanghai SSE composite gained 2.68% or 71.97 pts to close at 2754.35. Technically, SSE is now considered takeout 2703.51 resistance decisively. That also completes a double bottom reversal pattern (2449.19, 2440.90).
There are various ways to view the rise from 2440.90. For now, we’d treat it as a corrective rebound, correcting the down trend from 3587.03. Thus, strong resistance could be seen at 38.2% retracement of 3587.03 to 2440.90 at 2883.84 to limit upside. That’s also quite close to 55 week EMA (now at 2817.49).
