Technical Pulse: China Railway Construction Corp Ltd January 15, 2020 325

 

China Railway Construction Corp Ltd (HK: 1186) is expected to continue its upward momentum after a prolonged decline based on the technicals below:

  1. Falling wedge formation above the 50% Fibonacci retracement level of 40-9.18 and confluence with the support level at 8.79.
  2. Bullish pin bar above the support level of 8.79 and the 50% retracement level. On top of that, the bullish pin bar had the same low as the previous candle last Friday, resembling a tweezer bottom.
  3. The 22 SMA crosses over the 50 SMA early Jan 2020, forming a bullish crossover.

 

*The China Railway Construction call is valid only for 4 weeks.

*Although there is a strong upside momentum, the stock might correct further into the demand zone near 78.6% of the Fibonacci retracement level and stage a rally from there.

 

CHART LEGENDS

Simple Moving Averages

Blue dotted line = 50 SMA

Green dotted line = 22 SMA

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