aderoy

3800 GCI-Poly Energy: Update analysis 30 Nov 2020

Long
HKEX:3800   GCL-POLY ENERGY
Following my 3 previous GCI-Poly analysis, I have a the following update:

Today's price shows an extremely extended and bullish candle (0.61 - 0.81), which is a 0.20 price move in a single day and not within same candle sizes as others around it.

Historically, price candles with such bullish price candles of the same size or slightly longer (going back up to Aug 2011):
21 Dec 2017: price from 1.26 - 1.42
09 Jul 2015: price from 1.22 - 1.46
11 Nov 2014: price from 1.80 - 2.10
09 May 2014: price from 1.80 - 2.04
02 Feb 2012: price from 2.62 - 2.79
19 Jan 2012: price from 2.24 - 2.42
29 Nov 2011: price from 1.86 - 2.03
02 Nov 2011: price from 2.03 - 2.32
27 Oct 2011: price from 1.94 - 2.36
23 Aug 2011: price from 2.55 - 2.91

Interestingly, the top of the today's candle (30 Nov 2020) stops at price level 0.80. I also checked historical prices at this level and the resistance levels for today (30 Nov 2020 and the week preceding this candle) and I was able to dig up the following interesting data:

(1.) Long-term daily resistance occurred @ price level 0.80 on the following dates:
16 Sep - 03 Oct 2008
01 Apr - 28 Apr 2009
27 Feb 2019
30 Nov 2020

(2.) Long-term daily support occurred @ price level 0.70 on the following dates:
16 Sep - 03 Oct 2008
26 Mar - 01 Apr 2009

(3.) Long-term daily resistance @ 0.80 becomes resistance support flip on the following dates:
02 - 30 Jun 2017
01 Aug 2017
30 May - 15 June 2018

My conclusion from the above are as follows:
- As today's candle has hit a long-term daily resistance level of 0.80, I expect price retracement to/towards the long-term daily support level of 0.70
- It is also a sound assumption that investors might start taking some profits as we approach December holiday season given the excellent performance of the stock in the last 2-3 months. This will inevitably put pressure on the stock price.
- I will be buying more with the expected and healthy price correction.