Technicals | Apr 28 2010
By Rudi Filapek-Vandyck
The world's attention is once again turning to Beijing, and it is with concern that investors are asking the question: is the Chinese share market leading commodities into another leg down?
Technical commodity analysts at Barclays Capital offer their technical view this morning, arguing that while sovereign problems in Europe (Greece, Portugal) are capturing most of the headlines this month, further declines in the Shanghai Composite will ultimately make investors with long positions in commodities nervous.
That latter sentence is mine, not Barclays, but it says what the analysts imply in between their tech-talk sentences. From a technical perspective, the Shanghai Composite has now fallen through the sixty-week moving average, report the technical analysts, which is a negative signal, after earlier falling below the eight-month trendline.
If technical signals prove accurate, the odds seem in favour of more short term weakness for Chinese equities. This is unlikely to go unnoticed on commodities markets.
