Hansoh Pharmaceutical group (HK: 3692) has one more bearish leg before a strong rally based on the technicals below:

1. The stock has entered into a 5-wave rising wedge formation with the stock forming a (ii) wave of the larger D wave.
2. Bearish engulfing candle at 38.2% Fibonacci retracement of 20-30.45.
3. The strong demand level near 24.00 region may be a potential rally point. Therefore the bearish correction probability is higher.

*The technical call is valid only for 3 weeks.

CHART LEGENDS

Stochastic Oscillator

Red line = 80 Overbought

Blue line = 20 Oversold