Join Dstockmarket's Community - Daily Market Analysis, Individual Stock Analysis.
In this page, we will attempt to analyze DNEX using principles of technical analysis. We will be looking at the weekly, daily and 60 min charts.
It has been more than a year since I commented on this stock. A very hot stock back in 2017 but it seems this stock is now in a long term downtrend. Only yesterday the stock shot up rapidly on heavy volume.
I do not know the reason for it. Maybe because of some news. I will attempt to look at this stock for the benefit of Malaysian readers from the viewpoint of technical analysis.
The chart above is the daily chart of Dagang Nexchange. From a technical point of view, this stock shot higher because of a daily ascending triangle pattern breakout.
A textbook pattern target will be right about where it meets the resistance area.
There is a lot of resistance overhead and thus despite this rapid rise, investors will need to clear a very big hurdle before it can rise higher.
The declining daily 200 MA tells us that this stock is not of investing quality. Any stock that is below its daily 200 MA should not be touched from an investing point of view. Thus, this stock at the moment is suitable only for trading.
Let us take a look at the 60 min chart now to see why it shot up. There are clues of course. The first is where the stock breaks a 60 min downtrend line signalling to traders that it wants to go higher. Then there is a 60 min bullish cross box breakout.
Well, the rapid rise is indeed wonderful for those who bought the stock.
For my purpose I don't see any trade setups after the bullish cross box. Perhaps others might see some setups to chase this hot stock.
How high can this stock go?
Well, first point to note is the daily resistance. That would be an intelligent guess. Secondly is one can use the 60 min 20 MA. Since this stock rose so fast, any drop below the 60 min 20 MA would tell traders to be careful. As what goes up fast can go back down fast when a stock is in a long term downtrend.
Let us now examine this stock from a long term perspective. This is an ugly looking long term chart. The stock is definitely in a long term downtrend and investors should not be touching it.
Best to touch stocks when they are in an uptrend.
For a sustainable long term rise, this stock needs to break above the weekly downtrend line I have drawn. Then perhaps it can start its journey to its former glory again.
Until then, this is a stock that is worth trading but not investing.
After correcting from May 2017 to late 2017, DNEX is once again trying to make a new uptrend. Will it be able to sustain the new uptrend and move higher?
This is a stock that I remembered last year I did an analysis and set a price target on it. I usually do not set a price target for stocks but on that occasion, the stock was given a price target by some research house. I set the target a bit lower to incorporate the crowd psychology.
I shall attach the analysis I did last year below but for now, let us take a look at what the charts are telling us about the technical outlook for DNEX.
We will first of all look at the weekly chart of DNEX. The chart below shows how the stock had a nice bullish run up in the first half of 2017 and then it corrected to late 2017.
Dagang Nexchange shot up in early 2016 and paused awhile in March 2017 to form a consolidation. It then broke out of the consolidation box to go higher. DNEX met its weekly measured move target and started to decline from there.
The downtrend for DNEX ended at the price support area of 0.40. The stock then broke a weekly downtrend line and moved higher before declining again. I believe the recent move up might have absorbed the resistance around the 0.60 area.
At this moment, DNEX is telling us it wants to start a new uptrend. Whether it can move higher or not, we will need to consult the daily chart for some guidance.
The chart above is the daily chart of DNEX.
At this moment, DNEX's share price is hovering at price support as well as the 50 MA. When I see the construction of the chart pattern like the above, I usually like to draw 2 lines to connect the prices. That way, we can see some kind of a triangle pattern.
If DNEX manages to stay above the 50 MA and price support area and subsequently break out of the downtrend line, then it has a chance to continue moving higher.
Which way it breaks out in the next few days will be crucial.
Charts with the Freestockcharts.com label are courtesy of Freestockcharts.com
Charts with the investing.com logo are courtesy of Investing.com powered by Trading View
Jul 13, 20 07:44 AM
Here is a technical outlook for the US stock market.
Jul 13, 20 07:44 AM
Here is a technical outlook for the KLCI.
Jun 29, 20 08:04 AM
Technical analysis of the KLCI for the month of June 2020. What is likely to happen? Read here.
Jun 29, 20 08:03 AM
Well, sell in May did not materialize for the S&P 500 but the market continues to chugg higher. What is in store for us this month?
Apr 30, 20 07:49 AM
What is the stock market likely to do from this impact of the Coronavirus? Will it continue to fall or a bottom is near. We will use charts to guide us.