SSE has turn bullish since early July 2010

Since early July 2010, Shanghai Stock Exchange (SSE) has broken from the down trend channel and it is looking bullish now. This is despite the slowing growth and the various negative rumours of potential financial crisis looming China due to large property bubble and slowing export.

The SSE index is currently around 2570 and the near term resistance should be around 2900 where it is expected to meet the 200SMA. Subsequent resistance at 3150-3300 where one would expect some corrections. (even if it were to advance again)



While the slowing growth due to slowing export is true, the local market and local consumption is picking up. Even though the stimulus effect is waning off, there is still extra inertia from the move and it won't come to halt immediately. Hopefully the recovery in the western world will pick up speed and export will creep back. While slowing GDP is expected in China, the overall growth story is still intact. If the soft landing that China is hoping for can be achieve, the overall long term growth is still optimistic though in a slower pace.

To participate in China Growth while not being able to buy into the SSE stocks, one alternative is to buy through ETF. In SGX market, one can choose United SSE50 China ETF.