Technical Pulse: Sunny Optical Technology Group Co Ltd October 18, 2021 506

Sunny Optical (HKEX: 2382) has been ranging for 2 quarters despite a strong upside break in August based on our report dated 30th July. The subsequent head and shoulder formation has pushed prices back below HK$200 psychological level. However, recent technicals indicate that there is potential upside :   

 

  1. The hammer with a long lower shadow on 12th October which rebounded from the key support zone 1 was confirmed by last Friday’s bullish candle.
  2. Bullish candle has also broken above 61.8% Fibonacci retracement level.
  3. Although Ichimoku signals a bearish trend, last Friday’s bullish candle closed above the Tenkan-Sen. Should prices continue to break past 50.00% Fibonacci retracement, it will be a clear confirmation of the smaller double bottom at support zone 1.
  4. The RSI indicates a bullish divergence. Furthermore, RSI shows slight closure above the 40 oversold support line.

 

*Expected timeline of the trade is 8 weeks from the date of report issuance.

 

CHART LEGEND

 

Ichimoku Kinko Hyo

Red dotted line = 26 periods Kijun-Sen

Blue dotted line = 9 Periods Tenkan-Sen

Green Line B= 52 periods Senkou Span B

Pink Line A = 26 periods Senkou Span A

Black line = 26 periods Chikou Span. Lagging line

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