China-Biotics, Inc. (CHBT) : Chart Review

Background.

A member in the forum ask about CHBT.

Personally, I am not into FA and do not know how to dissect the earnings reports.

From what I can gather, CHBT suffer a drop in share price based on 2 possible reasons:

1. share dilution as they raise more cash (but did not highlight how they want to use it)

2. validity of their business and audited reports.

Point 2 above is more than enough to send any company down the drain (recall Enron).

Nonetheless, the focus of this post is to evaluate if there’s any buying merit for CHBT based on charts.

Daily Chart

From the Daily Chart, we can see that the Kijun sen (trendline) has start to flatten. And this suggest that CHBT has stabilise between $12 and $13; with $12 as a pretty good support.

However, at this moment, there isn’t any setup to show that it will go up.  We can also see resistance from the leading kumo at around $12.91

Weekly Chart

On the Weekly Chart, the support at $12 is even clearer. It is now sitting right on the kumo support.

However, even the Weekly Chart’s leading kumo seems to suggest that the trend has change and there seems to be a kumo twist ahead.

In other words, if $12 doesn’t hold, there is a chance that CHBT will breakdown further.

It is likely to face a fair amount of resistance as it tries to head higher; $13 on the Daily and on Weekly Chart, we can see kumo resistance at $14.49

Until CHBT’s chart can tell a better story, I can’t find a good reason to buy.