The Shanghai Index has developed a powerful rally and has moved above the critical resistance level near 3000. This is a fast and sustained up move that has the characteristics of a new uptrend. The long-term upside target for the Shanghai index is near 3400. The breakout rally is stronger than the breakout above 3000 that developed in March and April.
This is significant because the long-term Guppy Multiple Moving Average (GMMA) indicator has compressed and turned upwards. This shows that investors are developing more confidence that the uptrend is sustainable.
Also the short-term GMMA is well separated and this shows strong support from traders.
The most important feature of the development is the way the short-term GMMA has already moved above the upper edge of the long-term GMMA. This relationship is very bullish.