As worries about a potential slowdown in Chinese economic growth wan, the Shanghai Composite Index has shaken the downtrend that started in December 2013. But a successful breakout pattern and new uptrend are yet to emerge – recent chart activity indicates three possible patterns lie ahead for mainland shares.
The Shanghai Composite has a strong support level near 1980, which has provided the foundation for a double bottom pattern. The first test near this support level was at point A on the chart, with the second test at point B.
While it's too early to tell how the index's future activity may develop there are three possible development patterns.