China’s Shanghai Composite Index may fall a further 4 percent from yesterday’s close before finding “solid support” at the 2,655 level, according to Nomura Holdings Inc, reported by Allen Wan, Richard Frost.
Support will hold at that level as it’s close to this year’s intraday low of 2,661.45 set on Jan. 25 and is the gap in October when the Shanghai gauge surged 12 percent, Kenneth Chan, a quantitative analyst at Nomura, said in e-mailed comments. The index lost as much 1.1 percent yesterday to push the stock market into a so-called correction before ending down 0.3 percent at 2,767.06. Goldman Sachs Group Inc. said yesterday it wouldn’t “rule out” a further drop of up to 10 percent for Chinese stocks as economic growth slows and inflation quickens.
China’s benchmark stocks gauge may slide to 2,100 if it breaks out of the next “key” support level of 2,680, according to Chart Partners Group Ltd. “There will be bear bounces along the way but I have held a bearish short-sell view,” Thomas Schroeder, Bangkok-based managing director at Chart Partners, said in an e-mailed comment.
In technical analysis, investors study charts of trading patterns and prices to predict changes in a security.