It would seem as if the Shanghai Composite Class A index has topped for some time now, as it completed an explosive wave 3 advance, culminating in an ending diagonal triangle. The correction that is unfolding is a very sharp zigzag, and it should reach the area of support below, where both monthly, quarterly and yearly range expansion bar support meet. This area happens to be my estimated fibonacci retracement 0.382 zone. The quarterly time at mode analysis suggests the rally might continue after this intense but potentially termporary setback. Regards, Ivan.
Looks like the correction isn't done, judging by the recent price action.
It's safe to assume we might see a new sharp leg down here, but not confirmed yet.
hussain9
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I think we are in a possible ZZ correction
IvanLabrie
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Yes, exactly what I thought.
IvanLabrie
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Only thing is the time for wave 1-2 is off, unless it's a nested impulse, and it'd be tricky to label it correctly.
I prefer to forecast with time at mode for that reason, EW is too complex (at least if you use neowave, which I started learning recently).
As for the retracement, that'd be a very steep one, more than 0.618. There's no trade here, yet.
hussain9
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It is good to TRACE the impulse wave with indicators , as you can see in this daily chart , how is this impulsive wave is touching MA 50 in wave 2 and wave 4 and once correction started it will break down it and will touch MA 200
IvanLabrie
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I don't like MAs for this. MACD is somewhat good, as outlined in Bill Williams' and Connie Brown's books.
I use the 66 and 253 EMAs as proxies though. 1 quarter and 1 year.
IvanLabrie
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(Check out my audcad post, I found a nice setup based on cointegration, where we trade to close the spreads, when the price is far from said EMAs+CCI oversold)
hussain9
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possible target of B wave , confirm by break out of 4380: