Shanghai Composite: Double bottom signals potential upsideSSE Composite IndexSSE_DLY:000001BlueberryChinese stocks are not for the faint-hearted. It's a market with a lot of volatility, swings, and roundabouts. Despite this, we've been keeping a close eye on the Shanghai Composite Index over the past few weeks and like the pattern we are seeing emerge. As of the time of writing, the Shanghai Composite Index trades in the 3,500 range. A clear double bottom emerged in September and January last year, as indicated in the chart. We think this is a bullish pattern. When markets test the lows twice and rebound, conviction grows. The worst, it seems, is maybe behind us. New trades should take important note and understand that Shanghai-listed stocks differ greatly from the H-shares trading in Hong Kong. The Shanghai Composite primarily includes A-shares, domestic Chinese companies driven by local sentiment and liquidity. H-shares, though still Chinese firms, list offshore in Hong Kong and often reflect global investor attitudes rather than local momentum. Understanding your instrument is crucial. While Shanghai A-shares capture China's domestic economic pulse, H-shares in Hong Kong frequently mirror global risk appetite and geopolitical narratives. Our bullish case lies specifically with the Shanghai market. It is a bet on China's internal economic recovery, supportive policy measures, and improving investor sentiment. China’s economic stabilisation is underway. Stimulus measures from Beijing are gaining traction. Property market stabilisation efforts (which are medium term in nature) and easing monetary policy signal confidence. Domestic investors, increasingly optimistic, are positioned to drive a sustained rally. The Shanghai Composite Index could see upside towards the 4,000 and then 4,500-level in the coming years, if the rally continues. Our conviction rests on improving domestic fundamentals, policy tailwinds, and powerful market sentiment unique to mainland China's equity landscape. Caution is important, given the volatility nature of the index. The forecasts provided herein are intended for informational purposes only and should not be construed as guarantees of future performance. This is an example only to enhance a consumer's understanding of the strategy being described above and is not to be taken as Blueberry Markets providing personal advice.