Reaching resistance (2011-03-09 ICBC analysis)

I was really shocked when I found that HSI went straight up after lunch yesterday. It's really surprising. But now it is even more obvious that the index is facing big resistance now.



So today we would look at ICBC (1398.HK). Basically it is currently facing a strong resistance level; therefore, we could see the long upper shadow candle two days ago and the price jumped till just below the horizontal line yesterday.

I have identified two main trendlines that have much effect on the price movements. The green one is a long-term up-trend line. It has been supporting the price for almost a year. However, I don't think the price would have something to do with this line this time.

The red one is a medium-term down-trend line. Last week, ICBC broke this line and surged further. It shows that the bullish trend is in favor after the breakout, but it might fall back to this line after touching the resistance.

MACD is increasing, which is good; but it is at some high levels, which is bad. I expect the price to have a little consolidation and probably reach 6.0, 50%-fibs level and would bounce.

If the horizontal area breaks, 6.77 will be the next resistance. So it would definitely be a BUY if the price breaks 6.32.

On the other side, when the price falls to 6.0-6.04, we could think of buying the bounce, which is anticipated to go up to 6.2.