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China A50: Higher in wave (3)

Elliot Wave Analysis for CHINA A50

China A50 is the stock market index of the 50 top float-adjusted capitalization companies in China. The index is traded in two of the three Stock Exchange markets, Shanghai and Shenzhen. The third one is the Beijing Stock Exchange, in which are traded the small U.S listed Chinese firms. The Shanghai Stock Exchange is the world’s 3rd large stock market by market capitalization at US$7.62 trillion as of July 2021. It is also considered the biggest Asia stock exchange.

Monthly Range: Higher in wave (3) of ((5))

On the monthly trading chart (log scale), we can see a nice ascending triangle (top flat, bottom rising), labeled as wave ((4)) Primary wave. From the bottom of its wave (E), starts the ((5)), with the (1) and (2) to take place. Till now, the (2) has declined beyond the .786 Fibonacci retracement level. It is a ‘’must’’ to stop the decline here, to avoid reaching the start of (1), at 11495,7 points. This is the basic scenario. In the alternative scenario the ((5)) Primary wave has completed, so we would label this impulse (from ((1)) – ((5))), as a new III Cycle degree wave, and the so-far correction would be the IV Cycle wave or part of it.

The alternative scenario is secondary, cause of the price length of this ((5)) and the angle with which the ((5)) broke the upper trendline of the ((4))’s triangle. We can admit that the angle of ((3)) is steeper than that of ((5)).

Weekly Range: Higher in wave (3) of ((5))

From the weekly trading chart (log scale) above, we can observe clearer, the formation of (2), which should be an W-X-Y structure, For the shake of supporting the basic scenario, we see this corrective pattern as a double correction, where the W is the first three consecutive waves, the X is the next upward shallow rally, and the Y is the last wave till the end of (2).

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Written by Trade Zign

TradeZign (TZ) is a market forecasting firm,TZ's 10 full-time analysts cover every major market (commodities, stocks, energy, bonds, metals, currencies).

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