Li Ning (2331.HK) Confirmed An Inverted Head and Shoulder Pattern After the Upbeat Result

Market chart showing uptrend
Li Ning (2331), a sportswear company, reported that 1H adjusted net income climbed 22% on year to 683 million yuan and operating profit increased 32% to 898 million yuan on revenue of 6.18 billion yuan, down 1%.

After posting this upbeat result, the stock jumped 10%. In fact, the stock outperforms than the market as the prices soared more than 90% from March, while Hang Seng Index was up around 15% only.

Citibank said the increase of 1H adjusted net profit is over the bank's estimation at 12%. The bank said the growth was driven by better-than-expected sales and margins as well as lower-than-expected cost.

From a technical point of view, the stock confirmed an inverted Head & Shoulder pattern, calling for a further upside. 

Currently, the prices are reaching the record high level, suggesting a strong bullish trend. 

Bullish readers could set the nearest support level at HK$28.0 (the high of July). Trading above this level, the stock could consider a rise to the resistance level at HK$37.6 (100% measured move) and HK$42.0 (measured target of inverted Head & Shoulder).

Source: TradingView, GAIN Capital
Related tags: Equities earnings

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