Still some waves to go (2010-12-10 0915.HK analysis)

The index rose yesterday. So its really hard to predict the movement of HSI these days, but it is forming a head-and-shoulder pattern. Please remind that the neckline is at around 22,750 and if the index breaks it, the plunge will be very huge.

Anyway, before facing such a bearish market, we can try to dig some good potential small-cap stocks for short-term trading. I discovered one: LinMark Group 0915.HK



After breaking the red pennant, the stock surged crazily in late November and early December. We have missed this chance already. However, I think there would be a second wave coming.

First reason is that the stock did surge greatly in Jun10. Then during the plunge afterwards, the volume was not high. Corporate investors clearly were not selling their shares. They should be collecting and preparing for pulling the price to a higher level.

Therefore, after few months of consolidation, the price boosted again in late November. It is now moving towards 0.76. This is the first resistance level. The next one would be 0.87 which is the highest point.

But I expect that the price would go further than 0.87. I have thought of one opposing reason is that corporate investors were selling the shares during the consolidation period slowly, and lifted the price again to sell more in higher price.

However, the stock has been in this range since late 2009. I could not see much profits for these big investors. They would definitley require more profits for such a long time. Therefore, they would continue lifting the price upwards.