Next Stop On Shanghai Composite: 2719; Subsequent Supports At 2574 And 2320
The beating in Shanghai is getting serious. Here are some technical levels from Credit Suisse, which sees 2719 on the SHCOMP as the next support. If taken out: whoosh (which is a technical name for a drop all the way to 2320).
The Shanghai Composite looks to be heading for a test of 2719, where the neckline to the Q2/Q3 base is expected to offer support.
The Shanghai Composite has already completed a minor top below 2932, and looks to be heading towards 2719, where the neckline to the Q2/Q3 base should elicit renewed buying interest. We would look for a recovery attempt to emerge from this area, expecting the 2932 level to initially prompt hesitation. Extension through 2932 should set a better tone, with the index then needing to remove resistance at 3160/87 to re-energise upward momentum and target 3361 next.
Below 2719 should see congestion extending down to 2574/64 contain further weakness. Below this latter area would warn of a more significant bearish failure, warning of further weakness to 2389, maybe even the 2320 low.