AAC Tech bullish breakout from 2-year resistance, outperformance against Hang Seng Index intact

AAC Technologies 9-month downtrend phase is likely to have ended.

Medium-term outlook on AAC Technologies (2018 HKG)



click to enlarge charts

Key Levels (1 to 3 weeks)

Intermediate support: 53.30

Pivot (key support): 48.60

Resistance: 64.60/68.70

Next support: 34.00/31.45 (major/LT pivot)

Directional Bias (1 to 3 weeks)

AAC Technologies is a component stock in the Hang Seng Index that involves in research, development and sale of acoustic products and electronic components in the consumer electronics industry worldwide; also supplier for Apple.

Bullish bias in any dips above 48.60 key medium-term pivotal support for a further potential upleg to target the next resistance at 64.60/68.70.

However, failure to hold at 48.60 with a daily close below it indicates a failure bullish breakout move where its share price is likely to see a further drift down to retest the 34.00/31.45 long-term/major pivotal support zone.

Key elements

  • After a horrendous plunge of 80% from its 185.00 all-time high level printed on 13 Nov 2017, the share price of AAC Tech may have formed a medium-term bottoming configuration. The 9-month of downtrend phase has managed to find support at a long-term secular ascending trendline in place since its Dec 2008 secular low of 2.20 (see weekly chart)
  • In addition, the weekly RSI has exited its oversold region with a prior bullish divergence signal and still has further room to manoeuvre to the upside before it reaches an extreme overbought level at 84. These observations suggest a revival of upside momentum.
  • Yesterday’s price action has staged a bullish breakout from a 2-year descending trendline resistance from 13 Nov 2017 high (see daily chart) with its pull-back support now at around 53.30. Also, it has been evolving within a medium-term ascending channel in place since 29 Aug 2019 low.
  • The up move in price action that is evolving within the ascending channel has been accompanied by an increasing volume and relative strength analysis from its ratio chart suggests outperformance against the market (Hang Seng Index/HSI).  
  • The next significant medium-term resistance stands at 64.60/68.70 which is defined by the swing highs of 02 Nov 2018/25 Feb 2019, the upper boundary of the medium-term ascending channel and a Fibonacci retracement/expansion cluster.   

Charts are from eSignal 


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.