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FTSE China A50 Eyeing For A Potential Break Above A 4-Year High

ByCity Index
AuthorKelvin Wong
Published 01/12/2020, 01:17 AM

Medium-Term Technical Outlook: FTSE China A50

China A50 Weekly Chart
China A50 Daily Chart

Key Levels (1 to 3 months)

  • Pivot (key support): 14170

  • Resistances: 16000 & 16420

  • Next supports: 13560 & 12600

  • Directional Bias (1 to 3 months)

    • Bullish bias in any dips above 14170 key medium-term pivotal support for a further potential upleg up to test 14770 before targeting the next resistances at 16000 and 16420 next.

    However, a break with a daily close below 14170 invalidates the recent bullish breakout for a slide back to retest the ascending trendline from 24 May 2019 acting as a support at 13560.

    Key elements

    • The FTSE China A50 has managed to stage a rebound of 1.19% today after a recent retest 3 days ago on the former range resistance of the 7-month “Ascending Triangle” range configuration from 24 May 2019 low. This observation suggests a positive follow-through that indicates a potential fresh round of bullish participation after the earlier bullish breakout from the “Ascending Triangle” range on Dec. 30, 2019.

  • Long and medium-term upside momentum of price action remains intact as indicated by both the weekly and RSI oscillators that has continued to inch higher from their respective corresponding supports and have not reached extreme overbought conditions.

  • The significant medium-term resistances of 16000 and 16420 are defined by the 1.00 Fibonacci projection of the up move from Jan. 4, 2019 low to 19 Apr 2019 high projected from 24 May 2019 low and the exit breakout potential from the “Ascending Triangle” range.
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