CHINA SSE 50 INDEX

After more than 3 year-long downtrend, Chinese equity index SSE 50 is now showing signs of strength. In the last part of 2012, Chinese equities rallied sharply from three-year low levels. Sharp reversal on the SSE 50 Index first breached the long-term moving average at 1,670 levels and then broke above the downward trend line at 1,750 levels. We are likely to see a change in trend in the medium/long-term and this could result in a outperformance for the Chinese equities over the coming months. Latest breakouts are significant and  will have bullish implications for Shanghai indices.