China Momentum v. Money Flow

The Shanghai Composite displays a similar bullish divergence on 21-day Twiggs Money Flow to the DJ Shanghai Index. Follow-through above 2660 is likely, but resistance at 2820 is expected to hold.

Shanghai Composite Index

* Target calculation: 2600 – ( 2800 – 2600 ) = 2400

The Hang Seng Index shows a similar (Twiggs Money Flow) bullish divergence to the Shanghai Composite, but both display a sharp fall on 63-day Momentum below zero, warning of a primary down-trend. Expect a rally to test resistance at 21500, but the bear market will continue.

Hang Seng Index

* Target calculation: 19500 – ( 21500 – 19500 ) = 17500

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