Chinese Large Caps Ready For A Strong Bounce?
Alexandros Yfantis | Nov 01, 2018 04:29AM ET
COSCO SHIPPING Holdings Co Ltd (SS:601919)
The share price of COSCO has lost more than 40% of its value since the beginning of the year. The share price has been trading in a bearish trend making lower lows and lower highs for several months. Technically the bearish trend could soon end. Bears should use trailing stops to protect their gains. There several warning signs by technical indicators telling us that the strength of each new lower low has been weaker than the previous one. Price is trading inside a bearish channel and a break out above the 3.90cny level would be a first bullish reversal signal (share now trading at 3.76cny). Support is found at 3.50cny. Breaking the support level would be a bearish sign implying that the bearish trend is not over yet.
A longer-term resistance level is found at 4.25 cny and a daily close above this level implies more upside to come.
Concluding. Traders should keep an eye on COSCO share price because, after a multi-month decline of more than 40%, it is due for a considerable bounce of more than 10%
Gree Electric Appliances Inc of Zhuhai (SZ:000651)
The share price of Gree Electric Appliances Inc of Zhuhai has lost more than 35% of its value since January, when it was trading around 59cny. Price is now 38 cny and we could see a bounce higher towards 45cny. Support is found at the 35.50-36.50 cny area. As long as price holds above the support area we could see a strong bounce towards 45cny or higher. Short-term resistance is found at 40.50-41.30cny. Breaking above this resistance level will give us a bullish signal and we will then target the Ichimoku cloud resistance area of 46-47cny. I expect therefor a back test of the Kumo as long as we hold above the green rectangle support area.
Concluding, we remain optimistic for a move towards the cloud resistance area, where the big test of the longer-term trend will be answered.
Hangzhou Hikvision Digital Technology Co Ltd (SZ:002415)
The share price of HANGZHOU is in a long-term bullish trend for the last six years. Price is trading inside a bullish channel. However since March of 2018 the share value has decreased by 50%. It has fallen from 44.20cny to current price of 22cny. This correction has led price to fall below the weekly Kumo (cloud). Price has retraced 61.8% of the rise from January 2016 lows and has also reached the lower channel boundary. A reversal from current levels is highly probable according to the signals we get from several technical indicators. Short-term resistance is found at 25cny and a break above this area could push prices higher towards 28cny. However if the entire decline is over, we could see prices move towards the weekly Kumo around 34-36cny for a back test.
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The Kumo (cloud) is now important resistance. Only a break above it will make me expect new highs. We now focus on the short-term as we expect reversal signs for at least a move towards 28cny. A bigger bounce could provide even a 50% price rise.
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