Monday, April 6, 2009

Shanghai exchange: 50 day / 200 day moving average crossover?

Don’t look now, but the Chinese Shanghai index is about to experience a bullish 50 day – 200 day moving average crossover. This could be a technical positive for the Chinese and indeed the global markets.

As can be seen from this chart, the crossover has a pretty good timing record. Here’s how investing on the basis of this crossover would have performed going back 4 years. It would have got you in early 2006, through most of the bull market, and out in early 2008, before the bear market crash.

Well, it just might be telling you to get back in!