Previous highs followed by dramatic lows

China's stock market continues to surge, sending the Shanghai Composite Index to a three-year high and extending its gain during the past month to 22 percent amid record trading.

A look at eight previous occasions during the past decade when shares climbed this much, however, suggests short-term caution: the Shanghai Composite dropped an average 3.3 percent during the following month, with the gauge falling seven times.

The outlook was more optimistic for investors with a longer-term horizon, as the index climbed 6 percent over the next three months on average.