Monday, October 26, 2009

Elliott Wave: Shanghai Index May Reach ‘Greater Heights’

Bloomberg) -- China’s Shanghai Composite Index may be set for “greater heights” after breaking through a resistance level, according to DMG & Partners Securities Pte. The benchmark stock index last week surged 4.4 percent, breaching resistance at 3,068, DMG analyst James Lim wrote in a report today. The next test will be 3,406, the 161.8 percent Fibonacci extension of an earlier wave of gains, he added.

“We therefore continue to advise investors to leverage on this firm uptrend and buy into the various index-component counters for additional capital gains,” Lim wrote. The gauge is still on the third leg of the last and fifth wave of the current rally that’s “expected to propel the index to greater heights,” he said, citing Elliott Wave Theory.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aIH.BpHm9sPk

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