CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

HK Stock Focus Positive signals emerge in Geely Automobile

Article By: ,  Financial Analyst
February 27, 2018 6:59 AM

Medium-term technical outlook (1-3months) on Geely Automobile (HKG: 0175)



Key technical elements

  • The recent 33% plunge from its current time of high level of 29.80 printed on 22 Nov 2017 has managed to stall at a key medium-term support zone of 20.00.
  • The aforementioned key medium-term support of 20.00 is defined by the lower boundary of an ascending channel in place since Feb 2016 low, the former range resistance of 08/15 Sep 2017 and a Fibonacci cluster (38.2% Fibonacci retracement of the up move from 23 Dec 2016 low to 22 Nov 2017 current all-time high & the 1.382 Fibonacci projection of the decline from 22 Nov 2017 high to 07 Dec 2017 low projected from 04 Jan 2018 high.
  • Positive signs have emerged at the 20.00 key medium-term support. The stock price has formed a daily bullish reversal “Hammer” candlestick pattern on 09 Feb 2018, the daily RSI has staged a bullish breakout above its former descending resistance at the 50% on 26 Feb that indicates an upside momentum follow-through after it has reversed up from its oversold region. Lastly, a corresponding gapped up in price action seen yesterday, 26 Feb above the 23.55 neckline support of the bearish “Head & Shoulders” chart configuration/pattern which has invalidated the prior bearish breakdown triggered on 06 Feb 2018 (see daily chart).
  • The next significant medium-term resistance stands at the 33.90 (a Fibonacci projection cluster derived from 4.236 projection of the earlier up move from the 2.76 major Feb 2016 low to 26 Oct 2016 high projected from 23 Dec 2016 low and the 0.618 projection of the up move from 23 Dec 2016 low to 22 Nov 2017 all-time high projected from the recent medium-term swing low of  09 Feb 2018 (see daily chart).

Key levels (1 to 3 months)

Intermediate support: 23.55 (gapped up seen on 26 Feb)

Pivot (key support): 20.00

Resistances: 29.80 & 33.90

Next supports: 12.93/60

Conclusion

Technical analysis of the stock price of Geely Automobile suggests that its primary uptrend in place since Feb 2016 remains intact and looks set to resume a potential impulsive medium-term upleg after a recent correction of 33% seen from its current all-time high printed on 22 Nov 2017.

Therefore as long as the 20.00 key medium-term pivotal support holds, Geely Automobile is likely to stage another potential upleg to retest the 29.80 current all-time high level in the first step before targeting the next resistance at 33.90.

On the other hand, failure to hold above 20.00 should demage its primary uptrend and kick-start a pronounced corrective towards the next support at 12.93/60 zone (the former swing high area of 14 Mar/29 Mar 2017 & the 61.8% Fibonacci retracement of the whole primary up move from Feb 2016 low to 22 Nov 2017).

Charts are from eSignal

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024