(Bloomberg) -- China’s Shanghai Composite Index, the world’s second-best performer this year, may extend its rally as the margin between the index’s level and two moving averages widens, according to Asia Charts Pte. Analysis shows the gap, or “daylight,” between the Shanghai gauge’s price and its 13-day and 26-day simple moving averages has increased, signaling a strengthening of the medium-term trend, Ee Chee Koon, chief operating officer at Singapore-based Asia Charts, said in an e-mail.The Shanghai Composite has rallied 87 percent this year, trailing only Peru’s benchmark stock index among the 89 tracked by Bloomberg globally. It climbed 1.2 percent to 3,411.62 at the 11:30 a.m. break today.
“Though the Shanghai Composite Index has been charging up, there is little sign that the trend is coming to an end,” Ee said. The index may rise to a so-called resistance level of 3,650, he added. The 200-day simple moving average is also rising, showing the “long-term uptrend remains intact.”A moving average is a technical analysis indicator that displays the average value of a security’s price over a period of time.
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