A look at the Shanghai Composite weekly chart below reveals that the price is nesting between the confluences of all the three moving averages on the weekly chart! The 20/50/200 are all between 2894 and 2720. I have also enlarged the last few weeks of the price action in candle stick form. Something strange here what looked like a morning start (see the firs three candles) is now morphing into an evening star (see last three candles). Na, not intending to confuse anyone here but only putting forth a point here; price is dynamic and so are patterns. Therefore it is always wise to wait for confirmation from the price action before getting all bullish or bearish about a pattern! A break and a close below the 200 MA (2700 approx), will straight lead to a testing the 2500 and trend line support below.
Ok letting some fantasies run wild here (anyways fantasies are meant to be wild!), the daily chart below shows price taking support at the 200 periods MA. Infact it’s just about managing to hang in there (last bar is an Inside Bar) and that to In the Down channel! A break from here can aggravate the fall to perhaps testing the channel support below. Whereas a rise from here and then overcoming the 3000/50 would put the inverse H&S shoulder into play (their you have it- A fantasy till proven true!) and also negate the falling channel.
Great charts.
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