Breaking the wedge (2010-09-25 China Life analysis)

Hang Seng Index keeps on climbing everyday. I am optimistic on the index and would expect it to surge as high as around 22,800. So we should try to discover some good stocks which are components of HSI and would probably follow the bull.



Above is the daily chart of China Life (2628.HK). It is currently following the red wedge. Looking back the history, China Life fell greatly after breaking the large lime wedge. There was even a big gap there. I expect if the price breaks the red wedge now, the gap would be re-filled and the price would rise to around 33.3o and hit the lime bottom wedge line. Then we would have to further observe whether it will break the line or not.

Obviously, it really worth buying if breakout of red wedge confirms. So I would probably add this to JPHK on next Monday.