China Zaino broke out from the channel and started the Elliot 5th Wave finally. The long term uptrend is still intact as the stock still shows “higher high, lower high” type of pattern. Note that Wave 1 and Wave 3 took 2-3 months to achieve the high, this Wave 5 will probably take a similar 2-3 months to achieve new high.
China Zaino is testing its critical support at $0.23 (200D MA support) to $0.235 (61.8% Fibonacci Retracement Level).
Base on Elliott Wave pattern, China Zaino shall bounce back from this support and start the 5th Wave. However, Wave 2 and Wave 4 seems to over-correct to 38.2% Fibonacci Retracement Level.
China Zaino closed at $0.285 with a bearish marubozu candle. It dropped out from the current uptrend channel and also broke the 20D MA support line. If China Zaino can move up in the next few days, a new channel line (with different gradient) has to be redrawn. Otherwise it will be the end of the uptrend and the stocks will move into consolidation phase.