Tuesday, December 13, 2005

Beauty China (B15) as requested


So, we are in the Beauty World, let’s examine the heart of this beauty. At the bottom of the chart, we can see 3 Regression Channels (RC); (1), (2), & (3). We will know that RC (2)‘s trend is milder by comparing the height of RC (2) and its preceding RC (1). This clue is confirmed when finally (yesterday) it breakout with good volume at the junction of RC (2 & 3). Quite obviously we can see (on top of the chart) labeled (4), a Cup with Handle Pattern surfaced. In addition, we can bet its good likelihood of success by its wedged handle (5). Why, it‘s because probability of success of this type of handle is much better than the leveled one!. So “cheong”, right? Wrong! I was anticipating today’s follow up would be moderated. Why? This is because, at the handle: its sliding change was met with a leveled volume change (6), not a synchronized downward slide; this is volume divergence! That’s reason why today, despite of good volume, price change is small in comparison. This” cycle off volume” is to allow the sellers whom have not finish selling before to finish selling their ware.
The next favorable question is “can buy or buy?” Let’s us put on our TA gears and start scrutinizing it! Oversold or not?  - This is to get advantage point when buying. : MACD (7)envelope above its equilibrium level, Price above the Bollinger Band’s mid line, and RSI curled up from 35 to 55 are suggesting that it is not so!. However, Stochactics is screaming a BUY due its just emerged from the oversold area. Accumulation/Distribution is saved by its confirming OBV which is still marching smartly upwards. Concerning its future trend, ROC wormed down but still above its zero line and ADX down but D positively placed. This can be taken as uptrend would likely be continued but no instant rally can be envisaged soon!
Adding to this bullishness, is the Williams’ % R rounded its descent and already sharply shot up to -45 from -63.
To see the forest from the tree, we mustn’t forget our Candlestick. As of yesterday, a Morning Star already formed. This means the bears have been sent into hibernation and its robustness confirmed by today’s white candle.
In sum, weighing today’s Volume which is 5.8 mil, as against the 3.6mil (recent averaged 10 periods) and the contradicting “not so ambitious” Momentum exhibited in the chart, we can safely say that upward trend’s probability is high but certainly it would not be that of a “Too soon too fast!”

P/s: Someone has asked for Resistance and Support Level. Here there are:
Sub Reistance is 67 cents; already tested 6 times since middle of Oct 2005 and Main resistance is 72 cents. Sub Support: 58 cents and Main Support: 50 cents

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