China Railway Group Ltd (HKEX: 390) technical is set to rally in the short-term, breaking the curse of the downtrend:
- The inverted head and shoulder have been confirmed after prices breaks above the neckline resistance zone at HK$4.04-HK$4.11. Despite a throwback, prices resume the rally and test the immediate resistance zone at HK$4.26-HK$4.32 multiple times and it certainly has weakened the resistance zone.
- The bearish pin bar on Tuesday was invalidated after the appearance of the strong full-bodied candle re attempt the testing of the resistance zone.
- Golden cross remain intact as prices is still trending above all three major moving average.
*Expected timeline of the trade is 8 weeks from the date of report issuance.
Red dotted line = 200 period Moving Average
Blue dotted line = 50 period Moving Average
Green dotted line = 22 period Moving Average
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We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors like (but not limited to) a stock`s risk reward profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation
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