WB Weibo Chinese Twitter – Stock With Bullish Flag Chart Pattern

by Olivier on September 15, 2014

A China stock trading idea that is trading near its all time high. I am talking about WB – Weibo better known as the ‘Chinese Twitter – TWTR‘. The chart took out the all time high on an intraday basis and has pulled back since. In a few days we will know if this a bull flag in the making or if this was a false breakout to the upside. It is too early to tell, but based on the volume pattern and the long flat base pattern a consolidation pattern looks like the scenario with the highest odds. WB is displaying a lot of relative strength. This might very well be an early sign that WB is starting to emerge as a future leader. I bought an initial position on Friday and will increase my position if the bull flag scenario I outlined in my chart annotations comes to pass.

Click on WB – Weibo chart to enlarge:

The rather conservative bull flag price target area is around 28-29$. This is a trade that displays enough strength confirmation for me to be willing to put on a trade. But it is still slightly anticipatory in nature. For a purely reactive trade in nature one would have to wait for the stock to take out its all time high or at least break out of a bull flag pattern.

Today’s quote is taken from one of my favourite posts: Sun Tzu’s Principles

He who knows when he can fight and when he cannot, will be victorious. – Sun Tzu

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