The index made good progress last week starting the trading week with a white candle accompanied with large value turnover. The confirmation of the bullish start of the week came only on Thursday as the index was able to move higher with large value turnover compared to last week.
Looking at the weekly chart we can also see bullish engulfing pattern, where the white candle created last week engulfs the black candle created the previous week. The bullish engulfing pattern was also accompanied by large value turnover. They are bullish signs of reversal, but a confirmation is still needed.
For the coming week, there is a certainty that the index would continue its upward movement. However there is an upcoming resistance near the area of 3950 and 3980; these are areas from the resistance line stretching from Feb 2010. The same resistance line has been tested last Feb 18 but was unsuccessful at moving beyond that line. If the index is able to move beyond that line with large value turnover, this might be a sign that we might have a fighting chance to break above the standing downward channel; the resistance line since the start of the bearish trend last Nov 2010. We are still not out of the woods yet even if that happens, because there is still another major resistance near 4400, but at least we are gaining positive movements.
FGEN broke out of a falling wedge formation accompanied with very large volume last Wed. At the same time the recent run up also broke above the 65 day MA. The target price for the breakout is around 13-13.50.
There is an upcoming resistance at 12.20 which is the 130 day MA. For the coming week, there is a high possibility for the stock to move sideways for the mean time. It is possible that the stock would just move in a range between 65 day MA (red) and 130 day MA (orange). As long as the downward movement does not have large volume, it is safe to assume that the sideways movement is just a pause before the stock further moves upward.
LR also broke out of a falling wedge with large volume last Thursday. The target price for the formation is at 9.00. Upcoming resistance is near 8.80 which is the previous high.
LPZ broke out of a sideways channel last Friday, accompanied with large volume. Target price for the channel breakout is at 6.80. There is however an upcoming resistance near 6.00. It is possible that the stock may move in range between 5.60 and 6.00 as the RSI is very much overbought. As always, if the volume on the downward movement is larger than the upward movement, that may be an indication of a bull trap.
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