$LI setting up for a bullish rally
Updated
Hello dear padawans. Today we are going to take a look at LI, the Chinese car company. If you read what analysts say you may be torn between buying or waiting on this one. Here I am just looking at the chart.
Overall the outlook is very bullish for LI. All indicators on the chart are bullish on the daily timeframe. Volume today was not exceptional but above average, which resulted in that nice green candle. Additionally, LI is on the verge of breaking out of the triangle accumulation pattern, which has formed over the past 3 months after ATH. Seems like a good amount of time to cool off and reset for a new rally.
The textbook way to trade this pattern is to wait for a breakout bullish from the triangle. I am anticipating a breakout so I already entered the trade. I accumulated recently on every touch of the triangle support so I am already seeing some green after today's bullish candle. Remember that although outlook is bullish it doesn't mean we will go to the moon tomorrow. In fact, there is nothing saying it won't go down although I would be very surprised if that happens. Also, if it breaks bullish be on the watch for throwbacks as they happen frequently on this type of pattern (BNGO just did that today after breaking out of the same pattern--hopefully it will bounce back up tomorrow). Bottom line: if you enter a trade, put a stop loss that matches your risk tolerance.
The dotted lines are the targets on the way up in case we go there.
Good luck and safe trades!
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***The ideas shared here are my opinion, not financial advise to place trades. Please do your own research before buying/selling stocks***
Overall the outlook is very bullish for LI. All indicators on the chart are bullish on the daily timeframe. Volume today was not exceptional but above average, which resulted in that nice green candle. Additionally, LI is on the verge of breaking out of the triangle accumulation pattern, which has formed over the past 3 months after ATH. Seems like a good amount of time to cool off and reset for a new rally.
The textbook way to trade this pattern is to wait for a breakout bullish from the triangle. I am anticipating a breakout so I already entered the trade. I accumulated recently on every touch of the triangle support so I am already seeing some green after today's bullish candle. Remember that although outlook is bullish it doesn't mean we will go to the moon tomorrow. In fact, there is nothing saying it won't go down although I would be very surprised if that happens. Also, if it breaks bullish be on the watch for throwbacks as they happen frequently on this type of pattern (BNGO just did that today after breaking out of the same pattern--hopefully it will bounce back up tomorrow). Bottom line: if you enter a trade, put a stop loss that matches your risk tolerance.
The dotted lines are the targets on the way up in case we go there.
Good luck and safe trades!
Show your love:
If you get anything out of this TA, please hit the like button so other can find this analysis quicker.
Follow for more:
If you want the best entry/exits just follow me, you won't regret. Thanks a lot!
***The ideas shared here are my opinion, not financial advise to place trades. Please do your own research before buying/selling stocks***
Note
The market is not being very helpful today so we got rejected the first try:Note
We are still fighting that resistance. Hopefully we will break it next week.Note
Li on support of the 0 fib retracement. If it breaks and closes below we could see more downside.
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