While the S&P 500 and many indices in the states are trading near all-time highs, the same thing can’t be said for stocks in China! Since the highs in February, the Shanghai Index (SSE (LON:SSE)) has declined nearly 25%.
Could this large percentage decline be presenting an opportunity/entry point for aggressive bargain hunters? Yes!
The decline has the SSE index testing the bottom of its 3-year trading range and 5-year rising support at (1), while momentum is now the lowest since the 2009 lows at (2).
Setting a stop just below the dual support test at (1) looks to be a nice entry point for aggressive traders open to owning hard hit assets.
Stops are very much needed at this price point, as the next key horizontal support comes into play at the 20,000 level, which is a large percentage below current prices!!!