In this article, we will seek to analyze the stock chart of Dufu Technology using principles of technical analysis.
Dufu technology recently had a nice rally up. Thanks in part to it trading sideways for a period of time and then breaking out of a daily ascending triangle type of bottom.
When it traded above the daily downtrend line, it was sending signals to traders that it wants to start a new uptrend. Then the ascending triangle provided a buy setup. So far I only see a daily setup in the form of that ascending triangle. If you missed it you might have to wait for another daily setup.
It is now trying to start a new uptrend but the presence of the declining daily 50 MA and also price resistance on the left may offer some resistance to it.
So one needs to look at the 60 min chart for clues on whether it can continue to move up.
Sometimes it can be difficult to find entries for a stock. It is only when the stock rises rapidly then the public gets to notice it. But if we try to look at the smaller time frames, then we may be able to spot some trading opportunities.
One of the nice setups that can help traders to enter a stock that climbs up rapidly is the 60 min break downtrend line setup. I have not written on this trading strategy on this site but the gist of it is this:
You buy the stock when it trades above a 60 min downtrend line.
The trick is to learn how to draw a nice downtrend line. And there is no royal road to learning how to draw it. It takes experience.
In the 60 min chart of Dufu above, we can see two 60 min breakdowntrend line setups. One happen about a week ago and the other happen today.
So those who did not enter as it breaks out will have missed the boat and will have to wait for the next setup. Perhaps we can take the measured move and project it upwards to get a target.
The target area will be the resistance area in the daily chart. But do take note of the daily 50 MA that may act as a psychological resistance. If the stock can stay above the recent highs which is around 1.80 and drift sideways then the odds of it moving higher is good.
For those who enter when the stock broke the 60 min downtrend line, it won't be too much of a problem since they are already in the green by now and a proper trader management will be to put a stop loss at breakeven.
May 06, 19 06:04 AM
Technical analysis of the US stock market with coverage of futures.
May 06, 19 05:46 AM
Step by step technical analysis of the KLCI Malaysian stock market.
Apr 22, 19 06:55 AM
A technical analysis of the US stock market. I go through the major indices of the US market and see where it is likely to go.
Apr 22, 19 06:47 AM
Technical analysis of the Hang Seng. Learn how the Hong Kong stock market is doing and where it is likely to go.
Apr 22, 19 06:36 AM
Technical outlook for Malaysia's biggest market cap stock.