After forming a rare double inside day pattern two weeks ago, the Shanghai Stock Exchange Composite Index ended last week up 3.5%. The short-term target is the 200-day simple moving average currently at 2519.
It may be seen from the daily index chart that after breaking above the down-trendline DN-TL, prices are on a short-term uptrend towards the 200-day simple moving average near 2519.
The MEI(14), my proprietary indicator, is below recent levels registered just before previous failures of the index to reverse trend. However, and this is important, this does not imply that the index will not correct at this point. Indicators can be useful only at extreme levels but usually tell nothing in between those extremes, other than in the case of divergences or other special patterns.
Disclosure: no relevant positions.