Strong fundamental and technical China playI do like how some of the strongest plays in China are setting up for the perspective upside in Q4 and beyond.
Have a look at $NASDAQ:FUTU. High double and triple digits growths of earnings and sales four quarters in a row; strong and consistent ROE numbers; high eps growth estimates. Management owns 5% of the company. In conjunction with China government plans to stimulate the economy, most of the ingredients are there to support potential price advance of FUTU into Q4.
From the technical stand point, I may suggest several perspective:
1. My wave-analysis shows that a) the mid/long-term structure allows for substantial upside and b) price found important short-term support in 53 area and is now building the base before continuing advance towards next important resistance zones: 80-99.
2. Waves and fibonacci aside, notice how well the price creates a volatility contraction pattern on a weekly time-scale, with an evident accumulation signs and good weekly closes. That leads me to consider that sellers with selling volume are subsiding and buyers are ready to step in leading the price higher.
Overall there is quite substantial overhead supply from devastating 90% decline since 2021, strong fundamental and at least short to mid term technical stance make NASDAQ:FUTU a valid candidate for the buy list.
Trading thesis: if price manages to break-out above 67.5 with supportive volume confirmation, that shall be a buy signal. With tight 3-5-7% staggered stop loss. For cowboy type of traders, price moving above 64.10 could be a place to start opening the position with an intention of adding after 67.5 breach.
The short-term analysis is valid until price holds above Oct's low of 52.
