China: Potential for a Meaningful Rally
By Sheldon McIntyre Sep 28, 2012 10:30 am
In the case of Shanghai Stock Exchange Index, there is a convergence of key technical criteria that suggests that a meaningful rally is near.
I was unable to locate any seasonality charts for the Shanghai Stock Exchange Index, but the seasonality chart for the Hang Seng (INDEXHANGSENG:HSI) is very bullish into the end of the year.
Stacking The Probabilities
- Positive Divergence: The monthly and weekly charts of the Shanghai Stock Exchange Index show a positive divergence between price and RS.
- Trend Deviation: The index has declined to the 200-month SMA which indicates an extreme deviation in the bear market trend. Likewise, the weekly chart is showing the widest deviation from the 200-week SMA since mid-2010.
- Seasonality: On the margin, the seasonality chart for the Hang Seng points to strong gains into the end of the year.
This article was originally published on See It Market.
No positions in stocks mentioned.