China HongXing has formed a Head & Shoulders and at the edge of breaking out from a triangle. If China HongXing breakout from the triangle and go north with huge volume, the stock may go up to $0.27. Conversely, if the stock breaks out (the triangle support is also the neckline) and heads south, the stock may go down to $0.13.
China HongXing closed at $0.20 with another bearish marubozu candle today! It also broke the uptrend channel support, 50D MA, and short term critical 61.8% Fibonacci retracement level of $0.204. All other technical indicators show weakness of the stock price. It may face further sell down pressure because the stock price is at the bottom envelope of the Bollinger Band and also below the Parabolic SAR line. It will be critical to see whether China HongXing can bounce back from $0.20 to $0.205 level in the next few days. The next critical support level at $0.17 to $0.18.
After identifying a good stock and calculate the intrinsic value, the next important step is to develop a trading plan or investment plan of when to buy and when to sell. The first thing before I enter the position is to look for excuse for not to buy because it is easier to identify the not to buy signals.
When Not to Buy?
When the stock in on the down trend. I check whether the stock price is below 20D, 50D and 200D MA line. I do not want to buy a stock which may go lower and lower. I also use other Technical Indicators (MA, MACD, Parabolic Stop and Reversal, Bollinger Band, RSI, Stochastic) to confirm my analysis. Below is stock chart for S&P500, I show some Technical Indicators (MA, MACD and Bollinger Band) only on the charts otherwise the charts will be overcrowded when I include all six Technical Indicators. 
If there is no clear support line on the chart, I will use Fibonacci retracement to identify the support level. 61.8% Fibonacci retracement level is a critical support or resistance level that I will pay special attention to.
