Want Want China (151.HK): Eyes on the Breakout of Neckline at HK$6.05

Market trader analysing data
Want Want China (151), a food company, announced that full-year net income grew 5.0% on year to 3.65 billion yuan and operating profit rose 4.8% to 4.81 billion yuan on revenue of 20.09 billion yuan, down 3.0%. The company proposed a final dividend of 2.42 dollar per share and a special dividend of 1.10 dollar per share, taking the full-year dividend to 4.16 dollar per share, up 21.6%.

The prices have jumped around 8% after posting the result and is challenging the neckline at HK$6.05. Today, the stock opened higher but returned the level below the neckline.

Currently, the prices are supported by both rising 20-period and 50-period moving averages. Besides, the RSI also bounces after touching the former declining trend line drawn from November 2019. Both technical indicators would favour on the bullish side.

Readers should focus on the clear break of the neckline at HK$6.05. A close above this level would validate a bullish breakout of the ascending triangle. Readers could consider to set the resistance levels HK$6.41 (61.8% retracement between January top and March low) and HK$6.87 (78.6% retracement) respectively. 

On the other hand, a break below the previous low at HK$5.45 would trigger a return to April's low at HK$5.10.



Source: GAIN Capital, TradingView
Related tags: Equities earnings China

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