Join Dstockmarket's Community - Daily Market Analysis, Individual Stock Analysis.
In this page, I use technical analysis to try and gauge what is the current movement of Sino Hua An. We will try and figure its trend and what it is likely to do.
The latest analysis will be on the top. Past analysis are at the bottom so you can refer to them if needed.
Sino Hua An has managed to bottomed out in the 60 min chart trading back above its 60 min 20 MA and 50 MA. Currently it might be forming an ascending triangle pattern. If the stock can break higher above the top of the pattern, then it might continue to rise further.
It has been more than 2 weeks since I had a look at Sino Hua An. The problem with not looking at the stock chart of a stock every single day is you might miss important developments that may happen. So its kind of difficult for me to anticipate what might happen.
Therefore, this analysis should just be a supplement to your own analysis as I won't be able to cover it every single day. We will start out by looking at the monthly chart and then zooming it all down to the 60 min chart. That way we will have all our bases covered.
The chart above is the monthly chart of Huaan. As you can see, there is a support area below which I have drawn in blue line and a resistance area overhead which I have drawn as a red line.
So what happens when a stock is stuck between long term support and long term resistance?
Well naturally, it will trade sideways till it decides which camp is stronger. Which is why we should look for either a bullish continuation pattern in the daily chart or signs of a rollover in the daily chart. That is why if you are an investor in this stock, it is best for you to do a bar by bar daily analysis on the stock as important developments will happen as the day goes by.
The chart above shows us the weekly chart of Huaan. It broke out of a weekly ascending triangle and proceeded to shoot up higher nicely. Currently it is in correction but it is trying to find support at the weekly rising 20 MA.
Usually a stock can bounce up when it touches a weekly 20 MA. Which is why it is important for the stock to stay above the weekly 20 MA. If it fails to stay above this MA, then it is likely to go down lower. You also do not want to see the stock drop below the horizontal line I have drawn.
Otherwise, you can expect more selling in the stock.
In the past I draw some kind of triangle for you to see in the daily chart. You can scroll down lower in this page to see it. The stock actually broke down below the triangle pattern so naturally it was a bearish sign instead of a bullish sign if it breaks out higher above the triangle.
What I don't like about the stock right now is it is trading below the 50 MA. There is a bearish cross as well which is not very good for the stock. Usually I do not like to play stocks that are below their 50 MA as it just tells us that the stock is very weak. Good strong stocks always stay above their rising 50 MA and rising 200 MA.
There is a greenish bar today and hopefully it can trade back higher. If it doesn't then we might be in for a bit more selling.
Finally let us look at the 60 min chart of Huaan.
When the stock dropped below its 60 min 50 MA and had a bearish cross, the problem started for Huaan. This told us that a downtrend is beginning in the stock. Which is why it sold off so much. It tried to form an ascending triangle bottom as it hit support area.
However, there was no follow through to the ascending triangle. Instead of breaking out higher, it broke lower, hence the selling.
At this moment, the stock is trying to rally back above its 60 min 50 MA. What you want to see is for this stock to go back above the 50 MA decisively, have a bullish cross and also trade back above the highs of the ascending triangle. Then we might have a short term trend change to uptrend.
If not, we can expect more selling in the stock.
Hope this helps.
Happy investing and trading.
It has been some time since I commented on Hua An, but the stock looks like it is trying to develop some kind of continuation pattern.
Sino Hua An or just Huaan to many is one of the most popular stock in Malaysia at the moment along with Hengyuan.
So, the last time where I mentioned a possible triangle, it did not materialize. Nevertheless, the stock is still consolidating as you can see from the daily chart of Huaan below.
One thing I would like to draw to your attention is the declining volume each time before it runs up. We have a first declining volume as it consolidated back in Sept to November 2017. Then there was another period of declining volume as the stock drifted slowly down from November to December 2017.
Many of you will know that when a stock is trading sideways, a declining volume tells us that there is not much selling in the stock. Therefore, it can be a sign of bullishness in the stock as smart investors are still sticking with the stock.
The latest consolidation which I have drawn in the box is also experiencing a noticeable decline in volume. This is some encouragement to the stock.
There is still no discernible continuation pattern yet but as long as Hua An stays within the box I still consider it taking a rest as it hits resistance in the longer term charts. The stock is still staying above its rising 50 MA and therefore we can expect a bullish bias. But ultimately it will be breaking above the box that will be considered a breakout that will send Hua An higher.
The chart above is the daily chart of Sino Hua An.
As you can see, the stock dropped to the rising 20 MA and no doubt this provided some traders with a nice bounce up swing trade. Entry will usually be using some 60 min or 15 min chart trading setups.
At this moment, I still do not know what Hua An is trying to do except it is trading sideways. But we can usually try to anticipate what it wants to do. Right now, you might want to see if Hua An is trying to form some kind of pennant or triangle.
The declining volume as Hua An trades sideways is encouraging as we all know that a stock that is forming a continuation pattern with declining volume is often a good setup.
After a nice run up in the stock price, Huaan had a drastic drop. Will the share price recover or will it continue to go lower?
"To be or not to be" that is the question.
I guess in the stock market it's
"To go up or not go up" that is the question.
If you have read my earlier analysis on Sino Hua An, you would have realize that this stock was ripe for a correction as it was near a very long term monthly resistance.
However, when a stock is in a nice uptrend in the 60 min charts and the daily charts, they can often run up very nice and then suffer a fast break down. That is the nature of stocks running up to resistance areas.
The above is the 60 min chart of Huaan.
I have highlighted a 60 min ascending triangle play which some of you saw. It was a successful one. The stock rose and then corrected to the top of the ascending triangle to give us a correction to support setup. After that, it broke out one last time before suffering a nasty one day drop.
Seasoned traders would be selling on the way up while looking for continuation patterns.
Continuation patterns are a great way to ride an uptrending stock. But we do know that the higher the continuation pattern is, the riskier it is. Therefore, the first and second setups are usually the best.
Right now, I would consider the nice 60 min uptrend to be over. Courtesy of the nasty big red bar. This is where the seasoned trader will change from a trend trader to a guerilla hit and run trader (if they still want to trade the stock). Others will just move on to another nice trending up stock to play.
Looking at the daily chart of Huaan, we can still be optimistic about this stock as long as it stays above the low of the tail of the big red bar. This is where the stock told us it rejected to go lower. Perhaps it might meet the rising 20 MA and continue to consolidate further.
You might want to see if the stock can form some kind of a bottoming pattern as it nears the 20 MA.
If I were to play this stock, I would wait for a nice consolidation in the daily chart and play the breakout. If the stock falls below the low of the tail and falls below the 20 MA, we can expect to see it correct to the 50 MA.
This is an update I did the day after my first analysis of Huaan.
The stock formed a nice 60 min ascending triangle to play. What I hinted out in the chart was that the best ascending triangles are often the first and second.
By the time the 3rd of 4th setup appears, they can be quite risky especially when the stock is near a long term resistance. Sometimes the 3rd continuation pattern can offer a last gasp of glory for the stock to shoot up before collapsing rapidly.
That is the nature of stocks.
This is also a very hot stock in the Malaysian stock market. Well part of the reason is because it broke out of a very big ascending triangle which help it to shoot higher.
The above is the daily chart of Sino Hua An.
If we take a measured move target, we can see that the stock has already met the target. So some caution is needed here.
Especially when you look at the monthly chart of Sino Hua An where it is now touching a resistance area, you should be careful. Now, that does not mean the stock will collapse. It just means that it might be a bit late to buy. Unless another continuation pattern appears in the stock.
Whenever a stock touches a resistance area, I usually like to see it consolidate a bit and form a continuation pattern. The consolidation or continuation pattern acts to absorb the supply from the resistance. Once the stock breaks out from the pattern, it will present a nice trading opportunity for the trader.
And of course, there are plenty of trading opportunities for short term traders. Traders who like to buy and hold for 2-5 days can find ample trading opportunities using the ascending triangle in Malaysian stocks.
The chart above shows the 60 min chart of Sino Hua An. Recently there were 2 ascending triangles that develop in this stock. The first one was a very successful one. The second one is still in the process of the trade.
For now, as we look at the 60 min chart, I would stay bullish in this stock as long as it is above the rising 20 MA and 50 MA. It's just a simple trend following method I like to use. If the stock drops below the rising 20 MA, I would be cautious and if it drops below the 50 MA, then usually the short term trend is over.
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.