China has been exceptionally weak of late, with the Shanghai Composite losing its key 2,300 level. However, the FXI, ETF for the China, is printing a pretty textbook gap-down hammer candlestick today. “Hammers” are merely indicative of a potential change in trend with upside confirmation, rather than assuring it. Nonetheless, the gap-down could signal a selling climax. Of course, you want to see the lows of today hold.
I am also looking to see if price closes near the highs of today’s session, giving it a classic hammer look. Again, upside confirmation is key in the coming days. Otherwise, the China bulls will continue to be on the defensive.
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