Yanlord – Reversal or Continuation?

Trend: Downtrend & slightly sideway, 20ma down (turning flat), MacD below 0

Support: 1.57, 1.46, 1.32

Resistance: 1.72 (50ma close), 1.81 (100ma), 1.86

Observations:
Candlestick – Black candle with upper shadow. Moving sideways for past 1 week.
Histogram –Mixture of R & G. Bullish divergence is already seen.
RSI – Flatten at 50%. Bullish divergence is already seen.
Stochastic – Bearish crossover but has been moving flat. At around 40%.
Bollinger Band – Trading at mid band. Squeezing

Conclusion:
Yanlord caught my eye as it has been trading sideways for around 2 weeks. Normally when trending stock starts to trade sideways, it could be a consolidation point for continuation of the trend or could be a reversal point. Looking at the previous trend of Yanlord, it shows downtrend movement. During this downtrend, the indicators formed a bullish divergence. This bullish divergence could have been fulfilled as the trend now is starting to change to sideway trend. But there could still be chance that the trend could change to uptrend.
In order for the trend to turn uptrend, it must break the resistance level of the sideway movement. Hence, if 1.72 level is being broken, higher high could be formed at 1.81 – 1.86 resistance level. This 1.72 level could be a strong resistance level as it confluence with 50ma.
On the other hand, if the sideways support of 1.57 breaks, it could mean that the downtrend continues. This downtrend could seek the next level of 1.46 as support.
Looking at the potential upside and downside, both gives identical returns. In terms of riding the trend, it seems to be harder to ride the upside movement as there is multiple MA lines above resistance.

What to watch out for this week:
1) Breaking of 1.72 resistance to confirm the reversal to uptrend
2) Breaking of 1.57 support to confirm the continuation of downtrend

Trading strategy to adapt right now:
- If 1.72 breaks, one can adopt breakout strategy for long entry
- If 1.57 breaks, one can adopt breakout strategy for short entry

*Disclaimer applies