Sell set up – Bank of Communications ( HKSE 3328) and Shanghai Electric update ( HKSE 2727)

Hi everyone,

The ABC sell set up in Shanghai Electric set up I posted on 20 January was triggered by Friday’s weak close. I’ve outlined  some ideas on exit strategy on the first chart below for readers following this trade.

There is a similar set up on the cards with Bank of Communications. This would be triggered by a weak close today. I’ve outlined the set up on the 2nd chart below.

2727 HKSE - Daily. Source: Bloomberg

  •  There was a trend peak at the Fib cluster level outlined in my post last week
  • Entry was triggered at around $4.05 when Friday’s close was below the low of the candle making the peak
  • The initial stop is placed at the first point of failure just above the recent trend peak
  • This strategy splits the position in two with a profit objective half way between “3” and “B” for the first half.  This gets some money in the tin if a downtrend gets established but does not have the legs to take out the extreme low
  • The 2nd target projects that the potential new down trend being traded will be 127% of the correction from 3 back to C. If the down trend being followed develops a swing structure there may be a opportunity to amend this 2nd target if better Fib projections emerge
  • There is also scope to move  the stop loss behind new failure points if a down trend emerges

The 2nd chart below outlines the potential ABC sell set up in Bank Commerce (3328). A close below Friday’s low of $4.20 would confirm a potential “C” peak at a Fib cluster zone. This cluster zone consists of a 50% retracement of the last major swing down and projects that the B/C rally will be 127% of the A/B correction

3328 - Daily. Source Bloomberg

Cheers

Ric

About Ric Spooner

Over 30 years market experience - professional trader, broker, director
This entry was posted in Market, Shares, Stocks, Trading and tagged , , , . Bookmark the permalink.

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