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China Hongxing: Pushing upwards.

Monday, September 6, 2010

On 3 Sep, I suggested that China Hongxing might be taking a break with the near term resistance at 18c. Today, volume expanded significantly as the 18c resistance level was demolished.


Momentum oscillators are trending higher, forming higher lows.  The MFI's rise shows strong demand while the OBV's upward climb shows accumulation continuing. The MACD is still rising above the signal line in positive territory and the distance between the two is growing, a sign of strength.

On the flip side, the RSI is going into overbought territory, suggesting that the buying momentum is getting somewhat overdone.  Jumping in at this juncture to go long might be a risky proposition as the immediate upside target identified some time back at 19.5c seems within reach.

If price action starts detaching from the upper Bollinger and if the MACD's distance from the signal line starts narrowing, we could be seeing precursors of a reversal. So, we have to stay cautious and keep our eyes peeled.

Related posts:
China Hongxing: Taking a break.
China Hongxing: Retesting resistance.

2 comments:

Edmond said...

Hi AK71
Correct me if I am wrong.. it seems that ppl are still accumulating China HongX... shall we target a higher price of 22c? (Remember I read somewhere from the website this is the target price for China HongX)... Thanks ya.

AK71 said...

Hi Edmond,

China Hongxing's chart formed a gravestone doji today. Basically, price tried to push higher but ended up where it started the day. Volume is also lower.

OBV is flat today but the uptrend is intact. Momentum oscillators are still uptrending. So, the immediate target of 19.5c could still be attained, I believe.

22c is what could be the eventual target if 19.5c is taken out convincingly (ie. volume has to expand significantly as price rises). However, along the way to 22c, there are many minor resistance levels to overcome.

If I were vested, I would likely take some profits off the table if 19.5c were tested. Taking profits is never wrong. :)

This reminds me of how DMG had a target of 28c for Healthway Medical in early 2010 but I just acted according to what I saw in the charts.

An example:
http://singaporeanstocksinvestor.blogspot.com/2010/01/healthway-medical-needs-break.html

Good luck. :)

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