Shanghai Composite eyes potential rebound pattern:
The double-bottom pattern starts with the downtrend and a rebound from the low at 1984. The rally from 1984 reached a high of 2177 before collapsing into the current downtrend. The high at 2177 is the top of the middle peak of the 'W pattern'. This creates the potential for a W pattern trend reversal, also called a 'double-bottom trend reversal pattern.' This pattern would be confirmed if the index finds support near the 1980 area, thus investors and traders should wait for this downtrend to move towards 1980 has developed.
The double-bottom pattern sets two upside targets. The first target is near the peak of the middle of the W and suggests a rally rebound from 1980 with a target between 2150 to 2177. The distance between the bottom at 1980 and the peak of the middle of the W is measured and projected upwards above 2150 to give a second long-term target near 2310. This long-term target, which could take several months to achieve, is reasonable because it is a historical resistance level.
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The double-bottom pattern starts with the downtrend and a rebound from the low at 1984. The rally from 1984 reached a high of 2177 before collapsing into the current downtrend. The high at 2177 is the top of the middle peak of the 'W pattern'. This creates the potential for a W pattern trend reversal, also called a 'double-bottom trend reversal pattern.' This pattern would be confirmed if the index finds support near the 1980 area, thus investors and traders should wait for this downtrend to move towards 1980 has developed.
The double-bottom pattern sets two upside targets. The first target is near the peak of the middle of the W and suggests a rally rebound from 1980 with a target between 2150 to 2177. The distance between the bottom at 1980 and the peak of the middle of the W is measured and projected upwards above 2150 to give a second long-term target near 2310. This long-term target, which could take several months to achieve, is reasonable because it is a historical resistance level.
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