Optimistic (2011-11-11 Li & Fung analysis)

Its another concern-and-eased news again, leading great volatility in the financial markets... really hard to predict these sudden news.
















Above is the daily chart of Li & Fung (0494.HK). Not too much to say about it, the chart looks pretty obvious.

Since January 2011, the stock price has been beautifully fallen along the orange downwards trending channel. There was even no false breakout.

In late August, we could see a breakout. This breakout was further confirmed by the increased volume. It showed that the bearish trend has ended.

Then, it moved along the red channel, slowly going upwards. It is normal that going up takes more time than plunging.

First resistant is at around 16.2-17, given by both the red up-trend line and the purple Pitchfork.

First support is at around 14, given by the lower Pitchfork line; next one will be at around 12.5, given by the red channel which should be the ultimate support.

My view on this stock is that it would be rising gradually along the red channel and the purple Pitchfork as well.

When the two intersect, if the economic situation allows, it might follow the Pitchfork instead of the red channel. So I am quite optimistic on Li & Fung.