Monday, November 21, 2011

SPRD (Spreadtrum Communications) at 23.56 Confirmed a Double Top amid Bearish RSI Divergence Points Lower (SELL)

SPRD extended the decline off the record high at 29.98 (16 Nov) decisively through the 25.50 pivot support to confirm a double top formation (at 28.75/29.98 highs). The bearish RSI divergence (comparing 28.75/29.98 highs) suggests further downside as well. Further weakness exposes 20.65 (Support 1) near the rising trendline support (off 8.59/16.52/16.11 lows) and close to the 21.50 double top target measured from 25.50. A breakdown below there would open the 16.11/16.52 support zone (Support 2) near the 61.8% retracement of the 8.59/29.98 rally.

It would take strength above 26.96 (Resistance 1) to delay bears. However, only above 29.39 (Resistance 2) would negate and shift focus higher towards 29.98 (Resistance 3) for a retest.

Trading Indication:
Short-term: Sell at 26.40 or higher;
Target at 20.65 and lower;
Stop Loss at 27.00 (2.3%)
Long-term: Possibly buy lower

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