The pivot was actually yesterday. Today it took out the high then squatted. I’m going to take advantage of the squat and place a stop/limit buy at yesterday’s high.
My biggest issue here is that it’s a Chinese company. Also, because of that, the financial data is lacking. Nevertheless, the setup looks good and last quarter seemed to be a BO quarter fundamentally. I’m also not overly excited about the overall market direction.
It looks like a Stage 3 that broke back into a Stage 2 instead of 4. Perhaps it was the BO earnings that changed its trajectory. Whatever the reason, I see it in a Base 2 of the Stage 2. The contractions are less than 10% and the volume is very low.
This is a strong stock within the CD sector, but I’m not too excited by this sector lagging the SPX.
Stage 2 Criteria
|Bullish market trend||NO|
|Sector RS outperforming market||NO, CD sector is 16.95% below SPX|
|2x average volume on BO from Stage 1 or leading up to it||YES, from Stage 3 to a new Stage 2|
|30-week MA rising||YES|
|Price above 30-week MA||YES|
|Overhead supply over past 2 years||NO|
|Outperforming SPX||YES, RS is 84.42% above SPX|
|Length of previous Stage 1||38 weeks, 9.5 months|
|Identifiable base on weekly and daily||YES|
|Prior up-trend of at least 30%||YES, 30.63%|
|Length of base|
At least 9 weeks ascending base
At least 7 weeks for all other bases
|8 weeks, VCP|
|Contain elements of strength:|
RS at new high
Tight price ranges
|YES, all of those listed|
|Contain elements of support:|
Base on top of base
Price above 40-week MA
|YES, price above all MA’s and MA’s stacked|
|Shakeout near low of base||YES|
|Decreasing volatility from left to right||YES, down to 9.64%|
|2 – 6 contractions (typically 2 – 4)||YES, 2|
|Each contraction is roughly 1/2 the previous||YES|
|Deepest contraction < 50%||YES, 17.72%|
|Deepest contraction < 2.5X the market decline||YES|
|On right side tight price ranges from high to low of range||YES|
|On right side lowest volume in base||YES|
|Rising RS as emerging from base||YES, RS at 52-week high|
This is a Chinese company, not much financial data is available.
|Past 2 quarters EPS growth >= 25%||N/A|
|Past 2 quarters margin growth >=25%||YES, most recent Q is up 489.94%|
|EPS growth >= 25% in past 3 – 5 years||N/A|
|EPS surprises||N/A, no estimate data available|
|EPS break out||YES, most recent Q|
|Annual ROE >= 17%||YES, 21.96%|
|Earnings drift||YES, good ED after last Q BO|
I’m keeping this minimal because there are some things I don’t like. It’s a Chinese company, has limited financial data, in a weak sector and bearish market.