PESONA (8311): Bullish

Pattern: Rounding Bottom Pending Breaks Up

As shown in the weekly chart below, Pesona has formed a beautiful rounding bottom pattern, which takes about 1.5 years.

It hits the neckline, which corresponds to a strong resistance area as highlighted in the red rectangle. Last week bearish engulfing price action suggests losing bullish momentum.

Based on the projection (X) of the rounding bottom structure, the target price is around 0.88.

On the daily chart below, the price attempted twice to penetrate the resistance area (0.6-0.64) but did not succeed. 

I assume 3 scenarios going on from now:

1. Price makes a pullback before attempting to break the resistance area, as shown in the daily chart above.
2. Price hovers around 0.58-0.64 region to resume bullish momentum to hit the first target price of 0.88.
3. Price breaks up without consolidating and heads toward the target price.

My preferred scenarios are in the order of 1, 2, 3.

Should scenario 1 happen, it will provide a great opportunity to long on pull back at a better price (maybe around 0.54-0.56) after a reversal candlestick pattern shows up.

For scenario 2, aggressive traders can jump in first during the consolidating period. Else, you can wait for the confirmation of a successful break up.

For scenario 3, breakout traders can jump in after the price breaks and close above 0.64.

Else, we can wait for a break and retest pattern (also shown in the daily chart) to long at around 0.64. The downside of this is that the retest of the neckline might not happen.

I am bullish as long as it stays above 0.5.

Will the affordable housing theme play out for PESONA? Feel free to comment below in terms of fundamental, news, discounted cash flow or any other forms of analysis :) 

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Cheers,

Ming Jong

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