Since Q3 of 2014. We are closely monitoring China market. We indicated that a sudden movement to the upside was encountered last August 2014,and a break above 2200 level could trigger a possible start of bull market for China. Helped by cheap oil, lessening their oil imports expenses.
We did notice that after going above 2200 level, China became very strong since 2009 recession.
We still continue to expect this market to go on uptrend.
Targets and resistances:
2850 (61.8% retracement of 2010 peak, uptrend resistance of Nov 2011)
3150 (76.2% retracement of 2010 peak, uptrend resistance of July 2011)
3450 (2010 peak and 31.8% retracement of 2009 peak)
All targets and resistances has 2 or more technical reasons. I believe it will just be the start of China's Bull market.
One market that will benefit China Bull market in case it starts to go strong is Hong Kong.
HK is one of the weakest since 2009 recession and once of the markets that was not able to revisit 2009 in Asia.
Uptrend since 2009 is still intact, and always get bumped and was a great BUY opportunity, now that China is getting strong, we may see HK go strong as well.
First target is around 25300-26000 where 2014 high is and medium term resistance of Nov 2013.
27500 is also an uptrend resistance where medium term uptrend since Nov 2011 is located.
I may not be thinking correct, but in case it is a full blown bull market like the US, HK can reach as high as 33,000. Though let us not think of it as of this moment. :)
*** this China Bull market thing is against our expectation of an ending Primary III in the US, where Primary IV coming next(hoping Q4 2014 to Q1 2015). It could still be a China Bull market, but dont expect a straight line up. Just pointing out next target resistances. China and HK is one of the weakest primary markets in the world, let us give them a chance to shine at least getting back 50% or 61.8% from their 2007 highs.
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