I like China Minzhong's business and I like its prospects. I still have about a third of my original investment in the company which I paid about 58c a share for, having sold the rest for rather attractive capital gains.
In May this year, I increased slightly my exposure to the stock as its share price pulled back to $1.025 and $0.97 per share. The positive divergence between price and MACD has played out and the downtrend has been broken. Currently, the stock trades at $1.12 per share.
Based on Fibo lines, there is resistance at $1.13 and there needs to be a big push up on the back of higher volume to break this barrier. Otherwise, a pulling back to $1.05 or even $0.99 would not surprise me.
I am wondering if we could see the formation of a reverse head and shoulders pattern here which could be part of a bigger bowl formation. Ok, perhaps a saucer formation.
This could pan out to be a very nice trading opportunity. Pardon the pun.
Related post:
China Minzhong: Long black candle on good results.
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