Xiaomi (1810): From Double Bottom to Skyrocket!

At Xiaomi 1810 , unlike Alibaba, all financial data is in Hong Kong Dollars (HKD) since we are examining the stock on the Hong Kong Exchange. We observed a double bottom formation at 8.28 HKD for Wave II, which also coincides with the bottom edge of our Volume Node. From there, we've seen a significant rise, over 100%, in a relatively short period, with the low occurring at the end of 2022. Currently, we are in a range that has historically moved through very quickly, known as a Low Volume Node. We may either bounce back down from here or break swiftly upwards to around 21 HKD. Given that we are in Wave III, we anticipate surpassing the peak of Wave I significantly, targeting levels above 36 HKD.

Now, let's take a closer look into our long-term perspective on the chart.


Upon closely analyzing Xiaomi on the 4-hour chart, we note a commendable 33% rise from our entry for Wave ((ii)). Congratulations to all who participated in this trade. However, we've developed a bearish divergence on the RSI, indicating a potential decline to form Wave (ii), which should fall between the 50% and 100% levels. We've marked a significantly broad zone since we anticipate substantial upside potential, at least up to 36 HKD, which alone represents a at least 144% increase. It wouldn't make sense to rigidly exclude any scenarios, given our past observations of double bottoms forming for Wave 2.

The most probable range for this correction, in our view, is between the 50% and 78.6% Fibonacci retracement levels. However, we cannot dismiss the possibility of reaching the full 100%. There is a Low-Volume Node between the 50% and 78.6% levels, suggesting that if we cannot hold the first Fib levels, we might quickly drop lower—another reason for our broad stop-loss.