LI AUTO INC printing a hammer on the weekly

Updated

There isn't enough data on LI AUTO INC to make any significant analysis on the weekly chart but it is possible to see a hammer candle, which could mean a potential reversal depending on what the next candle prints. A green candle that closes above the hammer high would confirm the reversal. Ideally, the confirmation candle should be formed on strong volume to support the reversal. This is a weekly chart so we would need to watch the price action this whole coming week.

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***THE IDEAS SHARED HERE ARE MY OPINION. THIS IS NOT FINANCIAL ADVISE TO PLACE TRADES. PLEASE DO YOUR OWN RESEARCH AND ANALYSIS BEFORE BUYING/SELLING STOCKS.***

Note

On a more detailed level, LI fell about 44% from ATH. It seems that it found support around $26, a level that held for two consecutive days. There are mixed signs for LI at the moment.

On the daily chart below, it is possible to see there is a lot of overhead on the upside:
1. The 50-ema, which is the first resistance level to be broken
2. The downward trendline
3. The 14-ema
4. The 21-ema (it is now above the 14-ema, which is a bearish sign)
5. The $30.6 resistance, which also support for about 2 weeks and should now become resistance
6. The .618 fib level, which was resistance over the past couple of weeks
7. Finally, LI has to break the $30.9 level if it wants to see a rally

On the positive side, the Stochastic is curling up, and it seems the MACD (not on the chart) is starting to curl up as well, although the RSI still has some room to go down.

For those who have the stock, I would hold for now and watch closely what LI will do the coming week. Trading volume is really low so I wouldn't be surprised if the price continues trading sideways.

For those who don't have the stock and are willing to jump in, I think the safest bet is to see how LI reacts to the overhead resistance and start to dollar cost average. If you are more conservative can also wait for the price to re-test the $26.5 support on the daily and buy then if that level holds.

Note

LI broke out of the descending trendline. It is now finding resistance on the 21-ema on the daily chart. A close above the 21-ema (and trendline) would be bullish. Next targets are the .618 fib level, which has acted as resistance lately, and the $33.5 to $34 zone.

Note

Stubborn resistance at around $32 on the hourly chart. Still looking good though.

Note

LI found support on the 21-ema. MACD and Stochastic show bullish momentum but the .618 fib level is proving to be a very stubborn resistance:

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