Medium-term technical outlook (1-3 weeks) on Kingsoft Corporation (HKG 3888)
Key technical elements
- Kingsoft, a major Chinese software company that has key operations in video gaming development, mobile apps, cloud storage platforms and office software has continued to evolve inside a major “descending range” configuration since its all-time high level of 34.95 printed in May 2015. The lower boundary of the major “descending range” is now acting as a support at 9.17 which also confluences with a Fibonacci projection cluster level at 8.42 (see weekly chart).
- In the medium-term, the share price of Kingsoft has declined by 67% from its 21 Mar 2018 high of 31.10 and continues to evolve within a descending channel with its resistance at 13.76 (see daily chart).
- From its recent low of 10.06 printed on 30 Oct 2016, its price action has staged a rebound in a “Bearish Flag” configuration with declining/lacklustre volume. These observations suggest a “dead cat bounce” where a fresh impulsive down move shall materialise next (see daily chart).
- Longer-term momentum analysis as indicated from the weekly RSI oscillator remains bearish as it is still capped by a significant corresponding resistance at the 43 level without any bullish divergence signal.
- The key medium-term resistance stands at 15.36 which is defined by the swing high areas of 22 Aug/28 Sep 2018 and the 23.6% Fibonacci retracement of the on-going medium-term down move from 21 Mar high to 30 Oct 2018 low.
Key Levels (1 to 3 weeks)
Immediate resistance: 13.76
Pivot (key resistance): 15.36
Next resistance: 20.65/22.35
The medium-term downtrend remains intact for Kingsoft. As long as the 15.36 key medium-term pivotal resistance is not surpassed, its share price is likely to stage another round of potential downleg to target the key major “descending range” support at 9.17/8.42.
However, a clearance above 15.36 negates the bearish tone for an extension of the corrective rebound towards the next resistance at the 20.65/22.35 zone (former congestion area from 20 Nov 2017/10 Jul 2018 & 50% Fibonacci retracement of the on-going medium-term down move from 21 Mar high to 30 Oct 2018 low).
Charts are from eSignal
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.