Technical Pulse: Li Auto Inc January 13, 2021 237

Li Auto Inc (US: LI) technical and wave theory suggest further upside especially the final 5th wave of the minor phase has yet to complete:

  1. From the wave perspective, the wave 3 is considered an extended wave 3 and as such, the 5th wave is yet to complete after prices broke out of the falling wedge of wave 4. However, we shall not discount the fact that a complex flat might take place should the immediate resistance zone from US$36.75-US$39.60 rejects before a strong break.
  2. From the price action perspective, the stock has formed a bullish engulfing candle near the resistance zone, hence we are waiting for the breakout of the resistance zone for confirmation.
  3. Ichimoku indicate that 2 out of 3 of the “Sanyaku Kouten” has formed, pending the senkou-span A to break above B. However, do take note that the “Sankyaku Kouten” signal will be a weak signal as the bullish engulfing has broken slightly above the cloud. Also, the sequence for Tenkan-Sen crossing and Chikou-Span breaking above the candle moves simultaneously.
  4. Stochastic is moving towards the overbought line at 80, hence there’s room for more upside. Besides that, the 2 line of the Stochastic are diverging away, hence indicating a strong momentum ahead


*Timeline of the trade is 3 weeks from the date issued.



Ichimoku Kinko Hyo

Red dotted line = 9 Periods Tenkan-Sen

Blue dotted line = 26 periods Kijun-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

Notify of

About the author

Profile photo of Chua Wei Ren

Chua Wei Ren
Technical Analyst
Phillip Securities Research Pte Ltd

Wei Ren specialises in Technical Analysis and has 9 years of experience in studying classic technical price action. He also study and research extensively on Elliott wave theory, Dow Theory and Supply & Demand strategies as he believes that history plays an important role in how the market is reflected in the future.

He graduated with a Bachelor of Economics and Finance from University of Murdoch.

Get access to all the latest market news, reports, technical analysis
by signing up for a free account today!