Today's Hong Kong's public holiday, tomorrow it should jump, especially for banks, unless the US markets plummet today. It seems like the green line on weekly chart is still able to support the index. A rebound should follow.
Let's see an interesting stock.
Above is the daily chart of I.T. (999.HK). And the Group is mainly engaged in retailing and trading of fashion wears and accessories. (from http://aastocks.com)
Back to the chart. The stock price is obviously moving in a bearish trend currently, with a pretty steep slope.
The red line near the bottom represents its medium up-trend line. Apparently, I.T. made a nice breakdown at the end of Sept 2011. I could hardly see a strong support trend-line other than this until 2.50.
Andrew's Pitchfork does work on this chart. Using the high-low-high in July and August, I drew the purple pitchfork. We can see the upper line of pitchfork resisted the price well.
The stock price gradually fell. After reaching the middle line on 26-Sept-2011 at around 4.20, the price bounced and immediately plummeted again.
If the whole market is going to rebound, the resistant for this rebound for the stock would be at 4.70, which is around 17% from now. This resistant is given by the Pitchfork.
Going back a bit, there was an wedge formed in May 2011 - July 2011, shown in orange. The stock attempted to break the upper level a few times but failed. Then the price just broke the lower line and headed to lower levels.
By using wedge breakout estimates, the next support level would be at around 2.10, following the previous level at 4.20 which did support the price once successfully.
Therefore, after the price has rebounded to around 4.60-4.70, I would expect another plunge to as low as 2.50, and then 2.10 if it drops further. It would be a good time to SHORT at 4.60-4.
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