UMC (United Microelectronics Corp) at 2.24 Imminent Breakout of a Symmetrical Triangle Consolidation Points Higher (BUY)

UMC rallied out of the 3-month base (05 Aug-21 Oct) to reach 2.36 (27 Oct high) before consolidation took hold. The recent 13-day range has taken shape of a symmetrical triangle (joining 2.36/2.29 highs/2.07/2.14 lows). A break above 2.25 (Resistance 1) would confirm the breakout of the triangle consolidation and initiate the next upleg towards the 2.29/2.36 resistance zone (Resistance 2). Clearance above would offer scope for 2.54 (Resistance 3).

However, if bulls fail to sustain gains above the bear trendline (off the 2.36/2.29 highs), a downside reversal below 2.14 (Support 1) would dampen the bullish outlook and re-open the key 2.07 support (Support 2). A breakdown there would suggest near-term topping and shift focus lower towards 1.84 which guards the 1.77 YTD low (Support 3).

Trading Indication:
Short-term (or Intraday): Buy at 2.18 or lower;
Target at 2.36 and higher;
Stop Loss at 2.14 (2.0%)
Long-term: Possibly sell higher

HOLI (Hollysys Automation Technologies) at 8.49 Breakout of Rounded Bottom Pattern Underpins Further Rally (BUY)

HOLI extended the rebound off the 4.54 low to confirm the rounded bottom formation on break above the key resistance level at 7.50. The subsequent rally reached 9.26 before consolidating. An upside break above 8.70 near the bear trendline (off the 9.26/9.11/8.97 highs) would end the consolidation and initiate the next upleg towards 9.26 (Resistance 1). Clearance above would re-open the 10.50 pre-gap low near the mearsured target of the rounded bottom base (Resistance 2). Further strength there would offer scope for 11.54 (Resistance 3).

However, a break below the key 7.55/7.50 support zone (Support 1) would negate and re-open 6.30 (Support 2). Further weakness there would allow bears to seek 5.20 (Support 3) for a retest.

Trading Indication:
Short-term (or Intraday): Buy at 7.65 or lower;
Target at 10.50 and higher;
Stop Loss at 7.50 (2.0%)
Long-term: Possibly sell higher

DLTR (Dollar Tree) at 78.67 Bear Channel Resistance May Cap for Further Consolidation (Short-term SELL)

DLTR has been descending within a bear channel (from 25 Oct/08 Nov highs/26 Oct low) since posting the 82.49 YTD high (25 Oct). While the 79.51 level near the bear channel resistance (10 Nov high) caps, further consolidation towards 77.32 is anticipated (Support 1). A break below there would open 76.32 (Support 2) ahead of 72.30 (Support 3) where a potential swing low would be formed before buyers would reassert.

However, a sustained break above the 79.51 resistance (Resistance 1) would negate and confirm the breakout of the bear channel. Clearance above would allow bulls towards 80.92 (Resistance 2) which shields 82.49 for a retest (Resistance 3).

Trading Indication:
Short-term: Sell at 78.80 or higher;
Target at 76.32 and lower;
Stop Loss at 79.51 (0.9%)
Long-term: Possibly buy lower

TSCO (Tractor Supply) Potential Double Top amid Bearish RSI Divergence Points Lower

TSCO formed a potential double top reversal pattern (from 74.51/74.43 highs ) amid bearish RSI divergence. A downside break below 71.21 would expose 66.15 for a retest (Support 1). A breakdown there would confirm the double top pattern and initiate the next downleg towards 65.11 (Support 2) ahead of 58.49 (Support 3) which is near the double top pattern’s measured target at 58.00.

However, recycle strength above the 74.43/74.51 resistance zone (Resistance 1) would negate and allow bulls to seek the Fibonacci target at 76.34 (0.618x 58.49/74.51 from 66.15, Resistance 2) then the equality target at 82.62 (1.000x 58.49/74.51 from 66.15, Resistance 3).

Trading Indication:
Short-term: Sell at 73.50 or higher;
Target at 66.15 and lower;
Stop Loss at 74.50 (1.5%)
Long-term: Possibly buy lower

ZAGG (ZAGG) Bearish MACD points to further downside at 12.03 (SELL)

ZAGG extended the decline off the 14.00 high through the bearish rising wedge lower bounds (from 18/24/26 Oct lows) to test the 11.60 key support ahead of the current consolidation. In the meantime, the bearish MACD studies suggest further downside as well. A breakdown below 11.60 (Support 1) would initiate the next downleg towards 10.02 (Support 2). Clearance below would risk an extension towards 9.00 (Support 3) for a retest.

It would take strength above 12.75 (Resistance 1) to negate and re-open 13.33 (Resistance 2) which guards 14.00 (Resistance 3).

Trading Indication:
Short-term: Sell at 12.00 or higher;
Target at 10.02 and lower;
Stop Loss at 12.50 (2.0%)
Long-term: Possibly buy lower

LNKD (LinkedIn) at 80.10 Confirmed a Triple Top Reversal Pattern amid Bearish RSI Divergence (SELL)

LNKD extended the decline off the triple tops at 92.61/95.00/94.32 through the support zone of 82.99/83.60, confirming the triple top reversal pattern. In the meantime, the bearish RSI divergence (formed from 92.61/95.00 highs) suggests further downside. While the tough resistance at 85.49 near the former 82.99/83.60 support caps, scope remains for bears to seek 75.37 (Support 1). Clearance below would risk an extension towards the projected triple top target at 72.20 (Support 2). A breakdown there would expose the key 70.75 reaction low (Support 3) for a retest.

It would take strength above 85.49 (Resistance 1) to negate and re-open 91.33 (Resistance 2) which guards 95.00 (Resistance 3).

Trading Indication:
Short-term: Sell at 84.10 or higher;
Target at 72.20 and lower;
Stop Loss at 85.50 (1.7.0%)
Long-term: Possibly buy lower

RTH (Merrill Lynch Retail Holders) at 110.86 Staging a Bull Flag Breakout to Target the Record High (BUY)

RTH extended the rebound off the 106.61 low to break above the bear channel resistance (from 113.28/112.37/111.82 highs), ending the bull flag consolidation pattern. The upside break initiated the next upleg towards 113.28 for a retest (Resistance 1). Clearance above would re-open the 114.30 all-time high (13 May 2011) (Resistance 2). Further strength there would offer scope for the Fibonacci projection at 115.91 (0.618x 98.57/113.28 from 106.61, Resistance 3) ahead of the equality target at 121.63 (1.0x 98.57/113.28 from 106.61, Resistance 4).

However, a break below 108.61 would negate and expose 106.61 (Support 1). A clean loss there would confirm a lower swing high under the 113.28 resistance and risk a deeper setback towards 104.57 (Support 2). Further weakness there would allow bears to seek 98.57 (Support 3) for a retest.

Trading Indication:
Short-term (or Intraday): Buy at 109.80 or lower;
Target at 114.30 and higher;
Stop Loss at 108.60 (1.0%)
Long-term: Possibly sell higher