ftse china a50 weekly outlook for 17 aug to 21 aug back at support and 11480 will be the potential u

(Click to enlarge charts)

What happened earlier

The China A50 Index (proxy for the FTSE China A50) has inched lower but managed to hold above the 10700 weekly pivotal support.

Please click on this link for more details on our previous weekly outlook.

Key elements

• The Index is now resting at the 10700 support which also coincides with the trendline support (in dark blue) in place since 08 July 2015 (see 4 hour chart).
• The intermediate resistance now stands at 11480 which is defined by the 10 August 2015 swing high and the 200-day Moving Average (in orange) (see daily chart).
• The next resistance to watch will be at 12600/12980 which also confluences with the 61.8% Fibonacci retracement of the recent steep decline from 09 June 2015 high @8am to 08 July 2015 low @12pm (see daily chart).
• The intermediate term RSI oscillator remains bullish above its trendline support (see daily chart).
• The short-term Stochastic oscillator has dipped down and it is now just hovering above its oversold region which suggests that a rebound in price action is imminent (see 4 hour chart).

Key levels (1 to 3 weeks)

Pivot (key support): 10700

Resistance: 11480 & 12600/12980

Next support: 10180/10100 & 9700/9300

Conclusion

The Index is still above the 10700 weekly pivotal support which flashes a series of “higher lows” as seen in the price action. However, it needs to break above the 11480 intermediate resistance in order to gain impetus for a further upside movement to set sight on the 12600/12980 resistance zone.

On the other hand, failure to hold above the 10700 pivotal support may dampen the bullish expectation for a slide to test the 10180/10100 support. Only a break below 10180/10100 is likely to trigger a further decline towards the long-term key support at 9700/9300.

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