YZJ – Poise for breakout

Trend: Uptrend, 20ma up, MacD above 0

Support: 1.28 (20ma close), 1.21 (100 & 200ma close)

Resistance: 1.35, 1.46, 1.56

Observations:
Candlestick – Long white candle
Histogram –Many G. No bearish divergence is seen.
RSI – Overbought. No bearish divergence is seen.
Stochastic –Bullish cross. Around 70%.
Bollinger Band – At upper band. Band expanding.

Conclusion:
Yangzijiang had a great reversal in its trend after it has broken for a higher high last week. Its trend has changed to uptrend since then. Hence, going forward, will it be able to break for another higher high?
Based on yesterday’s chart, it had closed at resistance level of 1.35 which yet to confirm its break out. Hence, it is crucial today to see if it breaks this resistance level or gets resisted. To confirm the break out, it must trade and close higher than 1.35 level today. On top of that, it must have a high volume of close to 40mil. If the breakout occurs, the next potential resistance will be at 1.46, implying a good upside. But if the resistance level holds, it could probably get support by 1.28 support level, which might confluence with 20ma.
On the indicators side, there is still no sign of bearishness indicating that 1.35 resistance level will hold. But the only indication from RSI is that it just entered into overbought region which should cap its upside. Hence, there is a possibility of a sustainable breakout.
What to watch out for this week:
1) Breakout of 1.35 resistance with more than 40mil volume
2) Resisted by 1.35 and retrace to 1.28 level.

Trading strategy to adapt right now:
- Long when there is a breakout of 1.35 with high volume
- Wait for retracement to 1.28 support level before going long.

*Disclaimer applies