CCB (939:HK) Expecting Mark Up towards HK$8.60

China Construction Bank (939:HK)
The stock price made a breakout this morning, out of its possible accumulation zone since mid Feb 2018. A breakout would suggest the stock is ready for Mark Up towards 1st target at HK$8.60 with 2nd target at HK$9.00.

The stock's momentum also showed signs that the bears are exhausting as MACD indicator flattens and suggest a reversal of momentum may be in the cards.

A break below HK$8.00 will falsify the set-up.

Disclaimer applies.

Wyckoff's Law of Effort

Law of Effort Wyckoff's Law of Effort states that on any single trading day (or week depending on time frame), huge volume (effort) push by participants should see huge price movement, resulting in a wide spread (long body). This is a basic principle of effort and result. However, as per Singtel's case study, we saw huge selling volume on 11 May, yet the price action only shows a narrow spread (small body). This divergence of effort and result in Wyckoff's Law of Effort principles, indicates possible exhaustion in selling or hidden buying. Thus, with a lack of weakness, Singtel should continue trading range bound for the coming days or weeks till further strength or weakness is observed. Swing Traders who trades range can consider positions at 3.70-3.72, with exit target 3.76-3.78.

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