Chinese equities faced some selling pressure recently as surging COVID-19 cases and new travel rules imposed on Chinese passengers by several countries escalate investors' worries about the prospect of the country's economic growth and potential worldwide restrictions. CHNComp fell over 43.0% this year as Covid-related economic disruptions weighed on Chinese assets. However buyers launched an upward correction at the end of October 2022 and managed to erase some of the recent losses. Nevertheless bulls struggle to break above the key resistance zone around 6700 pts, which is marked with previous price reactions, 200 SMA (red line) and 23.6% Fibonacci retracement of the downward wave launched in February 2021. As long as price sits below this level, another downward impulse may be launched towards recent lows at 5000 pts. On the other hand, if buyers manage to uphold recent momentum and break above the aforementioned resistance, then upward move may extend towards next key resistance at 7765 pts.
CHNComp, D1 interval. Source: xStation5
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