Companies Week – A montage of Hong Kong setups

We try to look across as many markets as we can for different types of setups. One area of the world which seems to be offering a lot for the technically oriented trader at the moment is Hong Kong. For those who are focussed primarily in charts the Japanese and Hong Kong markets are well worth a look given their sympathetic opening times. In any case take a look at these setups and see what you think. If you think back to Michael’s mystery chart of several weeks ago you may remember that a chart is a chart – regardless of the underlying instrument. I will load these onto the CMC Markets Tracker Message Board as well so you can copy the analysis onto your own charts too if you wish.

As a really good example of a chart you could see anywhere in the world have a look at China Longyuan (916 HK) which is showing an almost textbook symmetrical triangle:

As is the norm with this type of pattern the trader will typically wait until after a breakout occurs to determine the direction. By reckoning the trader would be looking at an initial target of about $0.85 from the point at which the breakout occurs. Regardless of direction I am looking at a stop-loss level around $4.95 but I would likely raise or lower that a little depending on whether the position is long or short.

Next up is Sands China (1928 HK).

In this case the trader is looking at a potential short setup based on the Gartley ABC formation and the cluster of Fibonacci levels that you can see at Point C. The stop-loss for this setup is set just above Point C with the initial profit target lying mid way between Point X and Point B (~$22.20). There are a large number of potential Gartley setups in the HK market at the moment so if it’s a pattern that interests you then it may be worth checking out.

Last for today is China Everbright.

You can see here that the price is just breaching the support level which gives it quite a bearish look though in the session thus far today the price hasn’t continued to fall so a degree of caution is advisable. You can see that I have marked with a dotted line a potential stop area. The initial profit target for this setup is about $1.70 from the breakout which gives the setup a risk:return target of better than 1:3 which is pretty good.

Food for thought.

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