MIECO (5001): Bullish

Pattern: Rounding Bottom Backtesting The Neckline

Red Flag: Price Volume Divergence

As shown in the weekly chart below, a beautiful rounding bottom was formed. No doubt, it is a bullish price structure.

Let's look for more detail in the daily chart below:

Based on the daily chart, we can deduce a target price of 1.88 based on the projection of X. However, we will need to scrutinise closely on the recent up-move since October 2016, as illustrated in red line above.

Price has been trending higher since October while the volume is getting lower. A red flag of price-volume divergence, which signifies losing of buying interest. 

Unless seeing a re-accumulation by increasing of the volume, especially during the break-up of the neckline of the rounding bottom, I will be alert to trade MIECO (if not stay away). 

I am expecting a pull back to form a handle because of the red flag before resuming the bullish momentum.

Also, be extra careful in trading as we are only a few days towards 2017. The volume is very thin during the end of year holiday season. Any break out (up or down) might not be the true intention.

Enjoy the quiet trading period :)

Topics That You Do Not Want To Miss

How to determine the "bullishness" of the patterns- https://www.facebook.com/BursaSGXcandlestick/videos/378260995905662/

The Trade Management Technique You Need To Know - http://klse.i3investor.com/blogs/candlestick/114496.jsp

Best Way To Learn To Trade Without A Mentor - http://klse.i3investor.com/blogs/candlestick/113821.jsp

Entry Illustration - http://klse.i3investor.com/blogs/candlestick/113605.jsp

Stop Loss & Safe Trading - http://klse.i3investor.com/blogs/candlestick/113510.jsp

Position Sizing - http://klse.i3investor.com/blogs/candlestick/113061.jsp

Come Up With Trading Ideas & Turn Them Into Investing Ideas - http://klse.i3investor.com/blogs/candlestick/114110.jsp

Cheers,

Ming Jong

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