Wednesday, July 11, 2007

China paper TA

For charlesming:

This is what I think of chinapaper. From weekly, looks like a falling wedge. It's a bullish reversal formation to tell us that the bottom is near and is going to rise up. It's important that the other indicators (macd and stochastics) seem to support this chart formation too.

What action to take? If the top trendline (resistance level) is broken with higher than average volume, then I'll say it's okay. If you want to buy, can buy once resistance is broken with high volume.

Price already broken out of resistance, but volume doesn't seem to suggest that breakout is genuine. Might want to see a few more sessions. Gut feeling is this is a false breakout.