Amfraser says Yangzijiang Shipbuilding’s (BS6.SG) lengthy 3-month test of key $2.00-$2.08 resistance raises the odds of a breakout to $2.23-$2.33 in the coming weeks.

Technical analyst Najeeb Jarhom says the stock always repeats the trend of moving higher past key recovery marks. He notes, since bottoming out at 27 cents a year after its crash from $2.87 peak in October 2007, YZJ has recovered 70% of its losses, taking around an average 3-4 months to scale one resistance area to another. 

“It is already over 3 months since $1.88 was cleared (61.8% fibbonnacci retracement of the fall from October 2007 peak to October 2008 trough) and going by the average 3-4 months of clearing key hurdles, it should move well above $2.05-$2.09 in the next few weeks.” 

 

He says the next target is the 76.4% level at $2.26, with the uptrend confirmed by rising 50-day, 100-day moving averages, a "not overly overbought" RSI and rising MACDs. 

 

Stock is +1.5% at $2.05.