Among some big companies, I was trying to find out any worth-buying stocks. Given such poor investing environment, most of the large-capital stocks are more likely to follow the market to slump.
Above is the daily chart of China National Materials Co. Ltd. (1893.HK). The Group is principally engaged in provision of cement equipment and engineering services, production and sales of cement and other high-tech materials. (source: http://aastocks.com)
The stock price has been under the bearish trend since April, and was moving to lower levels slowly.
Due to the sudden drop of global markets, the stock price followed and a long black candle was resulted.
The red line represents the resistant and green line is the support. Purple lines are the pitchfork lines.
As we can see, the price just reached the middle line of the fork. Therefore, we can expect a little rebound here.
If the stock price breaks down, the next support will be at around 4.05, which is an extremely large drop representing around 20% slump. Nevertheless, given these few days' situation, such plunges are not surprising.
The upside target is at around 5.50, then the price would be more likely to stop rising and turn to downward in short-term.
However, in long term, this company quite worth investing. Cement is a crucial materials used in construction sites, and usually in last three to four months of a year, there will be lots of construction sites in China hoping to use up the funding by Government; therefore, this company would probably get good profits later.
If it really reaches 4.05, then we can consider buying this as a longer-term investment. But what we have to keep aware of now is that when the price drops below 5, we can sell and wait until 4.05 and buy again.
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