Wednesday, February 18, 2009

Shanghai Index Profit Taking Signal



If you've been following my blog you should be well aware that I've been bullish on the Shanghai Index since last November and since then this market has rallied significantly.

If you look at the above chart you will see a key reversal day (just missed being a bearish engulfment) at the 200 day moving average. This is a very significant technical signal and means we can expect to see some profit taking. I'm not about to become bearish on this index because it is one of the strongest world markets out there but I do feel we may see some money leaving this market in the future trading sessions based on today's reversal.

For those of you who are interested as to why I was bullish on the Shanghai Index last November can click here to read the original post.

4 comments:

Anonymous said...

Kevin,

How do you play this index? The etf FXI, does not seem to mirror the index, so is there any other etf that allows one to trade the Chinese mkt?

Thanks for your advice.

Kevin said...

I looked at FXI also and I agree with you, it doesn't mirror the Shanghai index. I don't actually trade this market but I still look at to give me some insight as to where money is moving into.

sk said...

May I just chime in and suggest CAF to play the China Shanghai index. It is a Closed End Fund by Morgan Stanley.

Kevin said...

Thanks SK

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