FUQI : Ichimoku Case Study

FUQI just announced that it has accounting irregularities for the past few quarters and that sent the stock plummeting by more than 30%.

I miss the boat when FUQI breakout of the kumo resistance and did not partake in its rise from $6 to about $32.

Having said that, FUQI represents a very good case study for Ichimoku as it has went one round of bullish signal and bearish signal.

Let’s have a look at the Ichimoku chart.

1. FUQI makes it first move when it breakout of the kumo resistance back in April 30, 2009. On the day of the breakout, the price went as high as $5.94 and we will use the high as an entry (we assume that we get the worst possible price)

2. After which saw the rise of FUQI from $6 to $25 in September where there is a small cross but without much heavy selling. As such, during trading, we can decide to take a profit or leave it as it is.

3. The big sell signal appears somewhere in October, 2009 when it breakdown from the peak and closes the gap and along with it, we can see the Tenkan sen crossing down rather aggressively (look at slope of Tenkan sen) and the Kijun sen is flattening which suggest the trend may be coming to an end.

4. From then on, there isn’t much strong buy signal. But a very strong sell signal appear during November, 2009. A one day reversal is noted right after its earnings results. Despite beating market estimate, there is a huge sell down on high volume. That, in my opinion is probably the last ‘safe’ day to get out.

2 replies on “FUQI : Ichimoku Case Study”

Don’t forget to mention the Chikou span, which also flashed its sell signal at the 2nd point in October.

On July 13th, 2009. note the failed price / kijun sen cross – the chikou span was above the prices and remained there till October.

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