Chinese Fingercuffs

• Posted by Greg Harmon
• on May 10th, 2012

A funny thing is going on in the Chinese Market. The large cap Index, the FTSE China 25, shown below by the iShares FTSE China 25 Index Fund, $FXI, in the solid red and black line, is showing a short term topping Head and Shoulders pattern. This pattern has been confirmed and has a price objective lower to at least 30.35. This index represents the largest and most liquid Chinese stocks. And it is pointing lower. But the broader Shanghai Composite, $SSEC, shown as the gold area, is showing a bullish Inverse Head and Shoulders bottom with a price objective of at least 2815. It

fell back thrrough the neckline of that Head and Shoulders Wednesday on the first attempt higher but the indicators seem to point higher. This dichotomy creates a situation where the trader is all tied up on both directions. A rotation within the Chinese market or a battle for overall direction. Sounds like Chinese Fingercuffs. This is how Wikipedia describes it but I will always remember it from Chasing Amy, clip below.

Warning: Not for the kids

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus