China Shenhua Energy: Another Upleg Expected

China Shenhua Energy (1088), a major Chinese coal miner, announced that commercial coal production dropped 7.1% on year ......

Uptrend 1

China Shenhua Energy (1088), a major Chinese coal miner, announced that commercial coal production dropped 7.1% on year to 22.2 million tons in April while sales were up 68.4% to 31.5 million tons. Also, gross power generation slid 9.7% to 9.97 billion kwh and total power output dispatch declined 9.9% to 9.32 billion kwh.

From a technical point of view, the stock retreated from the March high at HK$15.10 before posting a rebounding at HK$13.00, which is the level around the 61.8% retracement level. Currently, the prices broke above the declining trend line drawn from March top. It indicates that the corrective move from March top would be ended.

The RSI also posted a bullish divergence signal when the stock made a bottom at HK$11.96. The bullish divergence signal could suggest that the important bottom could be made as the bearish side is losing the momentum. Then, the RSI has broken the declining trend line drawn from March, suggesting that the momentum is turning upward.

In this case, bullish readers could consider to set the support level at HK$13.00 (the previous low) and the resistance levels at HK$15.10 (March high and the 61.8% retracement level between January top and March low) and HK$15.82 (78.6% retracement).

In an alternative Scenario, a break below HK$13.00 would call for a return to the March low at HK$11.96.


Source: GAIN Capital, TradingView

More from Equities

Disclaimer: The information on this web site 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. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.