JP Morgan Chase (JPM) – Double Tops!!

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JPM is forming at Double Tops and currently just sitting on the neckline at $37.70. Base on the chart, there is a very high chance for a breakout of this Double Tops chart pattern due to the following observation:

  • JPM is unable to break the 20D MA resistance (shaded in red) and bounces down.
  • 50D MA is crossing down 200D MA.
  • Stock price is hooking on the lower Bollinger Band
  • MACD is going to show Bearish Convergence
  • Parabolic SAR is going to reverse.
  • RSI and Stochastic are reversing and turning down.

Plus fundemantally, all the negative news in Euro zone debt crisis and no clear signs that the crisis can be resolved in near term. Besides the PIIGS, now Hungary is coming into picture! I feel this crisis is even worse than than US financial crisis because Euro zone cannot print money to save those countries.

The breakout target price is $27.70 which is close to the 61.8% Fibonacci Retracement Level. I find no reason not to short JPM by buying a PUT option base on the current analysis. In addition, the implied volatility (IV) is low that make the option not so expensive. Any contrarion out that have a bullish view?

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Yanlord – In Consolidation Mode

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Yanlord looks like getting into a consolidation mode and moving sideway, after the recent breakdown from a Mini Double Tops formation.

Yanlord may be forming a Bearish Rectangle in a Down Trend, with trading range between $1.70 and $1.56. Breaking down from this rectangle pattern will send Yanlord share price to about $1.40 which is 61.8% Fibonacci Retracement Level and also the estimated breakdown target price.

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Ying Li – Fundamental & Technical Analysis

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Fundamental Analysis (Base on FY2009 closing at Dec 2009)

  • PE = 56 (base on stock price of $0.39)
  • ROA = 1.9%
  • ROE =  3.0%
  • Net Margin = 50.7%
  • Net Cash from Operation = -$215 million

Comment: Current stock price is super overvalue (PE = 59!!). Poor fundamental because the YOY earning is not consistent & lousy ROA and ROE. Although the company provided a net earning of 50.7% but net cash is negative! If the company is making money, why the cash inflow is negative? I am not wasting my time to dig into the financial report to understand the detail and potential creative accounting.

Technical Analysis

Ying Li is currently trading within a Falling Wedge. Base on current chart pattern, the stock price may rebound from current wedge support if the breakout does not happen. The trading volume is fading for the part 9 months.

Ying Li does not meet my stock selection criteria fundamentally and I will not trade or invest in this stock.

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