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Zijin Mining excellent example of multiple technical analysis concepts

This weekly chart of Zijin Mining (2899.hk) is an excellent example illustrating various technical analysis concepts:

Zijin Mining weekly chart from early 2013 to January 2018

Zijin Mining weekly chart from early 2013 to January 2018

In this weekly chart, the key features to look out for are:

  1. A moving average roadmap comprising exponential moving averages of 4 durations – 13-week ema (quarterly), 26-week ema (half-yearly), 52-week ema (yearly) and 104-week ema (2-yearly).
  2. A rising equidistant channel that shows clearing consolidation high and lows, duration of consolidation and directional bias.
  3. High volume at point of breakout.

 

Observations

  1. Zijin persistently bounces over the moving averages – this kind of price action shows the stock complying to the roadmap and using the roadmap as a support. Both price and roadmap are rising so it is clear that directional bias is up.
  2. Over time, price prints an upward rising equidistant channel. The rising channel reinforces earlier observation from moving averages that bias is for an upward move. The channel itself is a visual confirmation that price is consolidating or building base. Proposition becomes clear: either wait for price to break out of consolidation pattern or attempt to buy at support. Channel low provides low-risk entry point while channel high offers target profit until price breaks out.
  3. After sufficient accumulation, the stock explodes upwards with high volume. We cannot tell how long consolidation will take but when price breaks out, volume is a good indicator to separate a genuine breakout from a fake one. Genuine rallies are accompanied by high volume.

This post here covers my previous post of Zijin Mining which was already looking at a bullish trajectory.

Zijin Mining weekly chart 2009 - present

This chart of Zijin Mining was posted on 11 August 2017

This post ‘What this moving average roadmap says about DXY trend‘ is another illustrating of using moving averages as a roadmap.

Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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