Wednesday 1 April 2015

Shanghai has reached our target of 3800, now it is a deadly cliff!

Dear Friends,

While a lot of investors may celebrate shanghai reaching a new 7 years high of 3800, we think that it might just have reached a deadly cliff. The more it goes up, the more this rubber band effect might cause it to drop hard.

3800-4000 is the distribution resistance zone.

Our chinese interview in December last year mentioning about our target of 3800 this year -

Although we still think that this bull run will still continue for a few years, we think it needs a correction badly. 

We are targeting a 10-15% retracement and a 9 months consolidation.

For those who are still holding on to your China shares, it is advisable to do a bit of profit taking. And please do not buy anymore Shanghai A shares or H shares.

Some investing friends who invested in China told me that some of the 创业板 a.k.a. technological companies in China has gone up 10-20 times. Let me tell you my opinion, they might suffer from a blumont collapse soon! The more a stock is speculated without fundamental earnings, the more it will fall.

Please avoid China shares like a plague now!


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