The Shanghai Composite daily chart analysis by Trading Lounge highlights a counter-trend phase within an Elliott Wave structure. The active wave is identified as gray wave C, positioned within orange wave 2, signifying the continuation of the corrective movement. The completion of gray wave B has set the stage for gray wave C, marking the next segment of the counter-trend correction.

In Elliott Wave theory, wave C in a corrective structure typically represents a decisive phase, aiming to finalize the correction before the trend potentially resumes or reverses. The ongoing gray wave C aligns with this concept, reflecting a corrective pattern within the broader orange wave 2 framework.

The analysis identifies a key invalidation level at 2684.5610. Should the price fall to or below this level, the existing wave structure would be invalidated, signaling a potential deviation from the expected pattern. Monitoring this threshold is essential for traders, as it serves as a benchmark for validating the current corrective phase and maintaining alignment with the anticipated wave structure.

Summary

The Shanghai Composite daily chart depicts a counter-trend correction driven by gray wave C within orange wave 2. The completion of gray wave B has initiated this phase, suggesting further movement consistent with the wave C pattern.

Traders should closely monitor the invalidation level at 2684.5610, as a breach would challenge the current wave structure and indicate potential adjustments to the corrective outlook. This level is critical for confirming the accuracy of the Elliott Wave analysis and guiding decisions within the ongoing counter-trend phase.

Shanghai Composite Elliott Wave Analysis Trading Lounge Weekly Chart

Shanghai Composite Elliott Wave technical analysis

Function: Counter Trend

Mode: Corrective

Structure: Orange Wave 2

Position: Navy Blue Wave 3

Direction (next higher degrees): Orange Wave 3

Details: Orange wave 1 appears completed, with orange wave 2 now active.

Wave invalid level: 2684.5610

The Shanghai Composite weekly chart analysis by Trading Lounge outlines a counter-trend corrective phase within the Elliott Wave framework. The active wave structure is orange wave 2, situated within navy blue wave 3, signaling a temporary pullback within a larger bullish trend. The completion of orange wave 1 has set the stage for orange wave 2, representing the ongoing correction phase.

In Elliott Wave theory, wave 2 typically exhibits a corrective nature, retracing part of wave 1 before the trend resumes. The current development of orange wave 2 reflects this characteristic, potentially paving the way for a continuation toward orange wave 3 once the pullback concludes.

The analysis underscores an invalidation level at 2684.5610. If the price drops to or below this level, the current wave structure will be invalidated, suggesting a departure from the expected corrective pattern. This threshold is essential for traders to observe as it verifies the validity of the wave structure and the broader market trend.

Summary

The Shanghai Composite weekly chart highlights a counter-trend corrective phase, with orange wave 2 active within navy blue wave 3. The conclusion of orange wave 1 initiated this pullback, aligning with the characteristics of wave 2 in the Elliott Wave sequence.

Traders should carefully monitor the invalidation level at 2684.5610, as a breach would challenge the current wave structure and indicate potential changes to the corrective outlook. This level is vital for maintaining alignment with the projected wave structure and devising effective trading strategies.

Shanghai Composite Elliott Wave technical analysis [Video]

Author

Peter Mathers

TradingLounge

Peter Mathers started actively trading in 1982. He began his career at Hoei and Shoin, a Japanese futures trading company.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.