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Sinovac Biotech Ltd (SVA) : Critical junction (Bullish or Bearish)

SVA has an interesting development last night.

As highlighted, I noticed that the support level at 7.40 was broken during the middle of the trading day.

The price went as low as 7.11 and what follows on the second half was the bulls fought back and close the day at 7.39 (very close the support level that is broken).

A better way to show is to look at the chart itself.

1. From the 3 highlighted points, we can see that

– Chikou Span (green line) has cut the price level and that is a bearish signal

– Tenkan sen (red line) is going to cut Kijun sen (purple line) and that is also a bearish signal

– On the Stochastic indicator below, we can see that SVA is now in the oversold territory. So, we might see a rebound and if it does happen, then Tenkan sen will not have cut Kijun sen (a small consolation)

– We can also see the leading kumo thinning out and flattening. This may be a consolidation phase for SVA. With a thin kumo, it does not take a lot for it to punch through resistance on top….. and that leads me to the next point.

2. What I am interested is the following:

– If you look at the drawings I made on the chart, you can see that there is a chance that SVA is possibly developing a cup-and-handle pattern.

– If it is successful, we have a winner (we won’t know till its over)

– If it fail and go below the support lines, it is best to get out of the position.

2009Nov-Sinovac Biotech Ltd Ord-800x600

By iam802

Trend trading with Ichimoku

3 replies on “Sinovac Biotech Ltd (SVA) : Critical junction (Bullish or Bearish)”

There is no cup and handle formation here. The handle has far exceeded the levels of tolerance to maintain the pattern.

Worse, it is staging up to set lower lows, than those of the cup marked at $6.94.

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