The Shanghai index is developing some of the characteristics of a trend reversal. The key feature investors were watching was the behavior of the index consolidation between 3,265 and 3,290. The 3,265 support level failed and the index rapidly moved to test the lower edge of the long term Guppy Multiple Moving Average indicator as a support level.
The significant feature now is that the lower edge of the long-term GMMA was successful in acting as a support level. That is a similar behavior to that following the market dip and rebound rally on July 17.
In the current situation, the long-term GMMA is more widely separated than it was on July 17. That suggests that the underlying uptrend is stronger and more resilient, which gives a stronger support base for a continuation of the rebound rally. That has two consequences.