Sunny Optical (HKEX: 2382) sell-off after reaching the high at HKD$248.00 region was nothing more than a corrective based on the technical indicated. As such, price action indicates a potential break to the upside:
- The formation of the bullish flag not only is a bullish continuation pattern, but it also symbolise a shortfall throwback retracement.
- Candlestick formation on Wednesday and Thursday indicate a bullish consolidation and rebound from key levels. First, the bullish candle on Wednesday shows a strong bearish candle initially but the rebound away from support zone 1 at HKD$203.25-HKD$211.20 and the 63- period moving average indicate a rebound building up. True enough, the inside bar formation on Thursday close above the 22-period moving average further cement the bullish upside.
- Short-term bullish crossover is still valid after prices resume trending above all three moving averages.
- MACD is pending a crossover to the upside, once the crossover is complete, it will further cement the upside potential.
*Timeline of the trade is 15 weeks from the date issued.
CHART LEGENDS
Moving Average
Red dotted line = 200 Periods Moving Average
Blue dotted line = 63 Periods Moving Average
Green dotted line = 22 Periods Moving Average
