$LKNCY – PENDING: Buy Order at Pivot High


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.

Stage Analysis

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 trendNO
Sector RS outperforming marketNO, CD sector is 16.95% below SPX
2x average volume on BO from Stage 1 or leading up to itYES, from Stage 3 to a new Stage 2
30-week MA risingYES
Price above 30-week MAYES
Overhead supply over past 2 yearsNO
Outperforming SPXYES, RS is 84.42% above SPX
Length of previous Stage 138 weeks, 9.5 months

Base Count

Base Structure

Identifiable base on weekly and dailyYES
Prior up-trend of at least 30%YES, 30.63%
Length of base
    At least 5 weeks flat base
    At least 9 weeks ascending base
    At least 7 weeks for all other bases
8 weeks, VCP
Contain elements of strength:
    Daily gap ups on volume
    RS at new high
    Tight price ranges
    KO Recoveries
YES, all of those listed
Contain elements of support:
    Support weeks
    Base on top of base
    Price above 40-week MA
YES, price above all MA’s and MA’s stacked
Shakeout near low of baseYES


VCP Criteria

Decreasing volatility from left to rightYES, down to 9.64%
2 – 6 contractions (typically 2 – 4)YES, 2
Each contraction is roughly 1/2 the previousYES
Deepest contraction < 50%YES, 17.72%
Deepest contraction < 2.5X the market declineYES
On right side tight price ranges from high to low of rangeYES
On right side lowest volume in baseYES
Rising RS as emerging from baseYES, 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 yearsN/A
EPS surprisesN/A, no estimate data available
EPS break outYES, most recent Q
Annual ROE >= 17%YES, 21.96%
Earnings driftYES, good ED after last Q BO

Order Details

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.

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