So far, the action in China Mobile (NYSE: CHL) has followed the bullish script that we have discussed since Sunday's Chart Video Update. We noted in that video that IF the Shanghai Composite did indeed establish a major bullish signal exhibited by a monthly (July) upside reversal, then a significant recovery rally in the China equity indices should have a supportive impact on some components of the iShares FTSE/Xinhua China 25 Index (NYSE: FXI), which exhibits a stronger pattern than the Shanghai.

Today CHL thrust out of its multi-month base pattern, and should be on its way towards a minimal upside target of 54.00, and possibly 56.00 thereafter. Only a decline that retraces all of today's gains, and presses the price structure back into the gap area beneath 51.80 into the closing bell will begin to compromise the timing of the anticipated upside follow-through. MJP 8/04/10 11:55 AM ET (52.33/34)

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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