The Shanghai Index has developed a new pattern of trend behavior.
It develops in a step-and-stairway trend pattern as shown by the thick black lines on the chart. This pattern is defined by trading bands that are all around the same width. This is around 400 index points.
The key feature of this pattern is how easily the market moves rapidly above the first resistance level – (4600 in the Shanghai index) and reaches the next resistance level (5000 in the Shanghai index). This is followed by a rapid retreat and rally consolidation that uses the full width of the trading band. It creates the first 'step' in the stairway pattern.