Update: Dec. 11, 2013

Signal:  Continue Long – with caution

From SeekingAlpha.com yesterday:

China Mobile (CHL{.broken_link} -1.5%) and China Unicom (CHU{.broken_link} -1.4%) have been cut to Equal Weight by Barclays. BofA/Merrill tried to temper iPhone expectations for CHL earlier this morning.

In the chart below you can see that the Barclay’s downgrade happened just as CHL was approaching the middle of a long term upward regression channel.  In the past we have noticed that announcements such as this (both bearish and bullish) have happened at key support and resistance points in other securities, so the timing of this announcement is no surprise.   CHL has gapped down the past 2 days and is trading slightly below the algorithm’s entry point of $52.65.   Time will tell (either today or tomorrow) whether this is a corrective move down to re-test the lower end of the regression channel, or if the stock will break through for further declines.

We officially have CHL on probation right now and will sell instantly should the stock not recover.  For now, large buyers are stepping in at the current level and the long-term support channel is holding.

 

CHL Daily (click to enlarge)

Nov 26, 2013

Signal:  BUY CHL – fill price = 52.65

China originally seemed like a disaster waiting to happen, but with over $1 trillion in new QE promised, it may be time to buy China.  Goldman announced that an AAPL deal with CHL  is imminent, and while it appears that investors sold the news,  the algorithm picked up a solid trading pattern dating back to April and is currently long.

The 180day WMA (green line) has proven to be solid resistance.  Intraday longs may want to take profit there.

 

CHL Daily chart – click to enlarge