China Geely automobile traces out a major bottoming configuration
Kelvin Wong November 26, 2019 3:58 AM
After a 19% decline from its 20 Nov 2017 all-time high of 29.80, Geely Auto is likely to have a bottoming out in the past 3 months.
Medium-term technical outlook on Geely Automobile (0175 HKG)
click to enlarge charts
Key Levels (1 to 3 weeks)
Intermediate support: 15.54
Pivot (key support): 14.16
Resistances: 17.00 & 18.50/19.14
Next supports: 12.44 & 10.33
Directional Bias (1 to 3 weeks)
Geely Auto, a major automobile manufacturer in China that engages in the research and development, production and the sale of automobiles (sedans, sport utility vehicles &electric vehicle models).
Bullish bias for Geely Auto above 14.16 key medium-term pivotal support for another round of potential upleg to target the next medium-term resistance at 17.00 and the major resistance zone of 18.50/19.14.
However, a daily close below 14.16 indicates a failure bullish breakout for a slide back to retest 12.44 and even the major support at 10.33.
- The major downtrend phase of Geely Auto from 20 Nov 2017 high of 29.80 has started to shown signs of “bottoming out” after a 19% decline.
- Since its 08 Jan 2019 swing low area of 10.33, Geely Auto has traced out a bullish reversal “Double Bottom” configuration with its neckline resistance at 19.14.
- The weekly RSI oscillator has staged a bullish breakout above a corresponding significant descending resistance in place since 20 Nov 2017 (the start of the major downtrend in price action) with the daily RSI oscillator that is still hovering above its support at the 51 level. These observations suggest that medium-term upside momentum has resurfaced.
- The 14.16 key medium-term pivotal support is defined by the pull-back support of the former major descending trendline from 20 Nov 2017, former 19 Sep 2019 swing high and the 50% Fibonacci retracement of the on-going 2-month up move from 25 Sep 2019 low to 08 Nov 2019 high.
- Since 15 Aug 2019, the price action of Geely Auto has evolved into a medium-term ascending channel.
- Relative strength analysis from its ratio chart suggests outperformance of Geely Auto against its benchmark Hang Seng China Enterprises Index (HSCEI), an index that a comprises a basket of China stocks that are listed in Hong Kong.
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.