The Coronavirus and the Shanghai Composite Index Price Forecast

By Invest2Success.com of Invest2Success

Founder, Invest2Success.com • Feb 4, 2020 at 10:04 PM EST

The Shanghai index gapped down in price 8% on Monday.

Daily Timeframe

The Shanghai index gapped down in price 8% on Monday, February 03 as you can see by the daily timeframe chart below. This large gap down in price on coronavirus fears could very possibly be a buying opportunity, especially for the long-term.

Shanghai Index Price Chart Forecast

Shanghai Composite Index Daily Timeframe Chart

Weekly Timeframe

On the weekly timeframe chart below you can see where the Feb 03 gap down went a little lower than the August 06, 2019, low, and now has currently recovered trading a little higher than 2,800 right now.

Near-Term Major Price Support

Current near-term price support is at 2,625.83 to 2,684.76 and needs to hold for any possible upside from here.

If you do take a long position in the Chinese market, consider this price area as your stop-loss.

Shanghai Index Price Chart Forecast

Shanghai Composite Index Weekly Timeframe Chart

Monthly Timeframe

On the monthly timeframe chart below you can see that the Shanghai index price is still above its multi-year low of 2,440.91 in January of 2019.

Shanghai Index Price Chart Forecast

Shanghai Composite Index Monthly Timeframe Chart

Shanghai Index and Stocks Buy Recommendation

We recommend lightly buying this gap down in price on the index and or individual leading China stocks. In the short term, there could be more downside and volatility. In the long-term, this large gap down in price has greatly reduced longer-term risk and very possibly provided larger price appreciation.

Buy On Fear Sell On Greed

Large selloffs like these in the short-term are scary to say the least but this is when discounts in the markets at their deepest with lower risk and higher reward potential. Look further into buying only leading Chinese stocks and you may very well be rewarded with some profits later on.

CoronaVirus Apple

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