Friday, July 17, 2009

Yangzijiang - Likely more downside risk

Yangzijiang could be poised for more correction in the days ahead following a bearish price breakout under the key $0.755 resistance-turned-support level and the 50-day MA yesterday.

With the RSI still firmly locked under a 2-month downtrend line and the MACD looking to initiate a bearish crossover of the centerline soon, they point towards further downside momentum.

However, it is likely that there could an immediate technical rebound to retest this key level; the failure to regain it would confirm that further correction is inevitable.

On the downside, we expect initial support at $0.635 (resistance-turned-support and 4-month uptrend line), below which, the next support is at $0.54 (key resistance-turned-support level).

Immediate resistance is pegged at $0.815 (minor peaks in Jun and Jul ‘09), ahead of $0.875 (2009 high).

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