The news that Trump delays the US-China trade truce deadline gives risk markets a general lift today. But performance in Chinese stock is overwhelming. The Shanghai SSE blew our expectations and closed up 5.60% at 2961.28. 38.2% retracement of 3587.03 to 2440.90 at 2883.84 was taken out with ease.
Technically speaking, it’s early to declare that China SSE is now in a long term bull market. The strong break of 55 week EMA is nevertheless a strong bullish development. Now, the corrective down trend from 5178.19 should have completed with three waves down to 2440.90, on bullish convergence condition in weekly MACD.
Current rise should extend through 3000 handle to 38.2% retracement of 5178.19 to 2440.90 at 3486.54. The reaction to resistance zone of 3486/3587 will reveal whether the SSE is really in a long term up trend.