FTSE China A50 eyeing for a potential break above a 4-year high

Further upside potential in China A50 after a bullish breakout and retest on the "Ascending Triangle" range former resistance.

Medium-term technical outlook on FTSE China A50

click to enlarge charts

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 30 Dec 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 04 Jan 2019 low to 19 Apr 2019 high projected from 24 May 2019 low and the exit breakout potential from the “Ascending Triangle” range.

Charts are from eSignal

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account