Infrastructure TA

Dongyuan Global Water, Inc (DGW): Ichimoku Case Study


This is one of the case study to support the idea of why Technical Analysis  is important. Note, I am not saying that Fundamental Analysis isn’t

A little background on ‘water industry’. One of the themes that were sold in recent years were all about the importance of clean water in emerging market.

Within this space, Dongyuan’s role is that of equipment supplier; the rising tide lift all boats argument.


I am not a FA expert. So, if I were to take a quick glance at the ratios provided by Google Finance, I would have seen some pretty good positive figures as per the following screenshot.

Net profit margin in excess of 20% in Q4 2010.

But, if we were to look at the chart, it is telling us another story.

DGW start to break down way back in Jan 2010. We can see how it breaks down from the kumo support and from then on, it hardly go above the kumo again.

Along the way, it break down another 3 to 4 times until it is trading at less than $5 now.

When a stock starts to break down, will you be buying when it has retraced 50%, 75%

I believe  DGW provides a very good reminder on the following:

  1. Always wait for the setup. No Setup; No Trade.
  2. Have your STOP-LOSS in place. If you are wrong, Respect it and execute it.
HKSE Infrastructure

Anhui Tianda Oil Pipe Company Limited (0839) : Very nice Cup and Handle formation

Previous post on Anhui Tiande highlights the kumo resistance.

And indeed, Anhui Tiande hit the kumo and retrace a little.

What happens next is it actually forms a cup and handle and when it break through the kumo resistance, it breaks through strongly.

Very nice 🙂

2009Nov-Anhui Tianda Oil Pipe Co Ltd-800x600

HKSE Infrastructure

Anhui Tianda Oil Pipe Company Limited (0839) : Kumo resistance ahead

Anhui Tianda just had 2 days of high volume buying and this lead to a gap up.

With the gap up, the chart is showing signs that Tenkan sen may cut Kijun sen; a bullish indication.

However, it was only back in July 13 that this counter had a bearish cross. Another occur in August in which its attempt to have a bullish cross failed.

Looking ahead on the chart, we can see that Anhui Tianda faces immediate resistance from the kumo at level at around 3.06 and 3.16 (if it ever break through).

Until, it breakthrough the above 2 levels, I believe it is best to adopt and wait for the signals to align.

2009Sep-Anhui Tianda Oil Pipe Co Ltd-800x600