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The main trend is down according to the daily swing chart. A trade through 2627.25 will signal a resumption of the downtrend with the next target the May 3 bottom at 2627.25, followed by the April 2 bottom at 2562.50.
The market is in no position to turn the main trend to up with the nearest main top coming in at 2824.25, but today’s session begins with the index inside the window of time for a closing price reversal bottom. This chart pattern could trigger the start of a counter-trend short-covering rally.
Bullish Scenario
A sustained move over the pivot at 2659.75 will indicate the presence of buyers. If this generates enough upside momentum to take out 2692.25 then look for the rally to possibly extend into the main Fibonacci level at 2701.75, followed by the short-term 50% level at 2725.75.
Bearish Scenario
A sustained move under 2659.75 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into last week’s low at 2627.25 then 2602.75, followed by 2562.50.
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• Stocks in Europe open higher on Monday as investors track a number of political events and wait for further earnings reports.
The pan-European Stoxx 600 was 0.28 percent higher with the majority of the sectors trading above the flatine.
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Hong Kong’s Hang Seng index also turned red, leaving MSCI’s broadest index of Asia-Pacific shares outside Japan mostly flat after rising over 0.5 percent earlier in the day.
• Japanese stocks slipped on Monday as further weakness in U.S. and Chinese shares dampened investor sentiment, although bargain hunting helped limit overall losses.
The Nikkei swerved in and out of the red in a choppy session reflective of recent turbulence in global markets. The benchmark ended the day down 0.16 percent at 21,149.80, after posting their biggest weekly loss in more than eight months.
• China shares fell on Monday as cooling demand ate into profits for industrial and consumer firms, adding to investors’ concerns about the slowing economy.
By the midday break, the blue-chip CSI300 index was down 2.3 percent at 3,101.16 points, while the Shanghai Composite Index was off 1.5 percent at 2,560.74, shrugging off Beijing’s latest attempts to bolster the country’s markets.
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