Technical Analysis Of Uchi Technologies

In this article we will take a look at Uchi Technologies from a technical perspective and try to understand what the stock is doing.

April 18 2018 Wednesday

Just like many Malaysian stocks, Uchi Technologies had an oversold bounce up. It is currently trying to test the downtrend line. If it can break above this down trend line in the daily chart, then we might have a trend change from downtrend to uptrend.

Breaking above the downtrend line will enable Uchi to start a new uptrend and we might see higher prices in the future. The other reference point we need to look at is the horizontal line that I have drawn. As long as the stock can stay above this horizontal line we can consider the movement as trading sideways.

But do be careful if the stock breaks below the horizontal line as it may send the stock lower to retest the previous low.

When we zoom into the 60 min chart, we are able to see things a bit clearer.

The reason why Uchi Technologies shot up is it broke above a 60 min ascending triangle bottom. That provided a nice trade for observant traders.

I think Uchi Technologies might be forming a 60 min ascending triangle. This time the continuation type. So do be on the lookout to see if Uchi can break above the top of the pattern. If it can do so, it will break higher.

On the other hand, if Uchi breaks below the uptrend line then you need to be careful.

March 14 2018 (Wednesday)

The downtrend in Uchi Technologies has not ended yet. However, it is reaching an area of support as well as the important 200 MA. Is this the time to start collecting this stock again?

Timing the entry for a "bottom fish" type of investment or trade can be problematic at times. That's because its awfully difficult to know when exactly a stock wants to bottom.

Thankfully some technical analysis might help us to do that. They don't work all the time which is why stop losses are very important.

Anyway let us take a look at what the stock chart of Uchi Technologies is telling us.

February 21 2018 (Wednesday)

The last time we had a look at Uchitech, the stock was falling to an area near the 200 MA. This is where traders need to look for signs of reversal. At that time there was still no sign yet. But if you look at the weekly chart of Uchi below, slightly after the analysis, a bottoming tail appeared in the weekly chart.

The bottoming tail on the weekly chart of Uchi provided an entry point for traders. The stochastics was quite oversold and there was a MACD Histogram valley that formed. The correct entry point was when the stock traded back above the bottoming tail or hammer in the weekly chart.

Right now, it may be less rewarding to enter. The stock may continue to move higher but for a better entry right now, we will need to look at the 60 min chart for setups.

There might be some who fear that Uchitech might form a double top. But so far I do not see a big possibility of it happening yet since the MACD histogram and bollinger bands are not showing the classic divergence characteristics that happen so often in perfect double tops. So, in other words, there is a high possibility of Uchitech moving higher and even making new highs if the short term uptrend in the 60 min chart continues.

The chart above shows the daily chart of Uchitech. Right now, the stock is encountering some resistance from the 50 MA. If the stock can trade sideways and then break out above the trendline, then it might go higher.

Besides the bottoming tail in the weekly chart that gave traders an entry into the stock, short term traders were given a 60 min box consolidation setup breakout. The pattern has already met its measured move target as it hit the daily 50 MA. Which is why it is correcting right now.

At this moment, we can still consider the 60 min uptrend to be intact and therefore should remain bullish. However, we need to be patient to wait for some 60 min setup to enter this stock. As long as the stock stays above the rising 60 min 50 MA, then we should remain bullish bias.

Trading needs to have some patience and also be willing to pull the trigger when signals appear. At this moment, patience and waiting is needed.

February 6 2018

The chart above is the daily chart of Uchitech. The stock broke an uptrend line and proceeded to collapse lower. If you did not spot the breaking of the uptrend line, you would have spotted the stock dropping below the 50 MA.

The stock is now very near to the powerful 200 MA. Its powerful in the sense that every serious investor will be watching this stock when it trades near the 200 MA. There is some price support there. What Uchi does at this area will be important. If it can stabilize and find support at the 200 MA, then it has a chance to rise.

Otherwise a furious selling will happen to Uchi because as you know....

Stocks that break below the 200 MA is often condemned by many many investors and traders.

At this moment I do not see an end to the daily downtrend yet. After so much selling I would at least want to see the stock trade back above the 20 MA (red line) before I deem it safe to try and bottom fish this stock.

By the way I never like to play downtrending stocks. Waste a lot of energy and effort.

The chart above is the weekly chart of Uchi Technologies.

After hitting a very long term resistance (not shown), the stock declined. I must say that the stock is dropping to the weekly 50 MA and it is quite oversold at the moment. The stochastics has not given a buy signal yet. Perhaps it will in a few weeks time, so you need to pay attention to that.

But what I would like to see most is for the stock to break above a downtrend line. I have drawn that. It gives me much more confidence to know that the stock has the power to break above a trend line. Trend lines are extremely important because they are often used by very experienced and (rich) traders. So which is why you also need to pay attention to it.

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