Brilliance China's (1114-hk), a Chinese vehicle manufacturer, share price has nearly reached the upper range of our forecast made in mid-June, marking a high at $9.13 on July 7.
Last week, the China Association of Automobile Manufacturers reported that China's vehicle sales grew 11.6% on year in June and production was up 22.5%, possibly suggesting that the recovery in consumer demand is on track.
From a technical point of view, Brilliance China (1114-hk) maintains a bullish bias despite a pull-back, as shown on the daily chart. Its share price is probably heading back to fill the gap made on July 6, while a rising trend line drawn from April should act as a support. Bullish investors may consider $7.00 as the nearest support, with the 1st and 2nd resistance at $9.13 and $9.80 respectively. Alternatively, a break below $7.00 would suggest a loss of momentum and might trigger a deeper correction to the next support at $6.50.