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Technical outlook of Lii Hen's stock chart and stock price.
As with this analysis just like most other analysis of other stocks, let us start with the big picture by looking at the weekly chart.
First of all this stock has been trading sideways but drifting up slowly for quite a long time.
If you draw some trend lines, you will be able to see a very large ascending triangle that is building up in this stock. The sideways action happened because the stock needed to absorb resistance from the left.
But the fact that the stock is drifting up higher to form a possible ascending triangle means that there is strength in the stock in the long term.
If the stock is able to break out of this pattern it will go higher.
Target will be the height of the pattern which will mean that the stock is capable to go back to near its former highs of $4.25.
But do keep in mind this is a large weekly ascending triangle. Each bars means one trading week and thus one can expect a possible long time before this happens.
The lower trend line is something that long term investors should keep an eye on.
As long as the stock stays above this lower trend line there is a possibility of it going higher but do be careful if it falls below the trend line.
With the big picture dealt with, let us move on to see the daily chart.
Yes, the stock is already in a daily uptrend.
Therefore breakouts, continuation patterns and buy the dips can be played.
The most recent nice setup is where the stock dropped to a support area (green area) and broke a downtrend line. As you can see, the stock immediately shoot up.
This is classic technical analysis as a congestion support area is a strong support area and any drop to that area is a high probability trade.
I think the stock is a bit overextended right now and one should be patience to wait for another buy setup to appear. But for short term purposes, watch the minor support area. If the stock is any healthy short term it should stay above the minor support area.
Next you want to look at the daily uptrend line. As long as the stock stays above this uptrend line, then there is a possibility of it able to move higher.
Put this stock on your watchlist.
Be patient and look for continuation patterns and buy the dip patterns.
And most importantly lookout for the weekly ascending triangle breakout as this may signal a potential big rise in the future.
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