The Shanghai Composite index breakout has continued to pause as it develops a bullish consolidation.
The consolidation comes as the index has successfully tested and retested a support level near 3,360. The momentum of the uptrend has reduced, but it has not failed.
The consolidation remain bullish because the short-term Guppy Multiple Moving Average indicator remains well separated. The upper edge of the short term GMMA is above the resistance level near 3,360 and the lower edge of the short term GMMA is near to the 3,360 level.
There are three other bullish features that continue to suggest this uptrend will continue.
The first feature is the steady degree of wide separation in the long-term GMMA. This shows investors are also very confident about the future of the trend.
The second feature is the way the upper edge of the long-term GMMA has moved well above the resistance level near 3,290. The degree of separation in the long-term GMMA also remains steady.