Shanghai Composite – Daily timeframe
Current Sentiment: Bearish
Support 1: 3226 Resistance 1: 3301
Support 2: 3200 Resistance 2: 3327
Price has been moving in an uptrend since May 2017, but it is currently approaching the key resistance area at 3301 area. There seems to be a major struggle around the 3301 resistance area as the recent shooting star rejection off the 3301 resistance area on 02/08/17 resulted in a 3% correction.
The most recent rebound off the 60 day moving average managed to take price back to the critical 3301 resistance once again, but price appears to be facing a brick wall.
There was yet another bearish rejection off the 3301 resistance area on 24/08/17, possibly forming a triple top formation here. Moreover, the bearish rejection resulted in price forming a Bearish Engulfing Bar on 24/08/17 signals a reversal into a correction next.
Expect price to turn down next once the bearish follow through occurs where price targets the 3226 support area followed by 3200.
Further sign of weakness will formalise once price closes below the uptrend line.
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