The fortnight at the end of January and the beginning of February certainly rattled China’s CSI 300 Index of leading shares in Shanghai and Shenzhen. It was not alone. The move mirrored across the world as investors suddenly took fright. Looking long term, one can see that this index has been working in a relatively narrow trend channel since March 2016, its lower edge once again doing a good job limiting the downside. The 26-week moving average has also scooped many weekly lows along the way, helping prices inch higher over the past three weeks. If we can hold above the psychologically important 4,000-point level this month, expect another rally to the upper, very wide trend channel at around 4,400 points.

Nicole Elliott is a technical analyst