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Markets

Lifting the hood on China Mobile Limited (CHL)

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Several emergingmoney.com readers have been asking about how to trade China Mobile Limited ( CHL , quote ), so here it is. Feel free to continue to log your requests via @rrittorno .

After a hitting a 52-week high of $51.98 on September 14, CHL price action pulled backed slightly and began to trade sideways within a channel ranging from $46.30 on the low end to $50 on the high end. Within the channel, the 150-day moving average acted as support until recently, providing traders a channel with a channel.

Price has now turned around from the bottom of the outer channel and is bumping up against the 150-day moving average in anticipation of a potential move back toward the upper half of the channel.

The channel sits right in the middle of the Fibonacci upward wave, which is suggesting a breakout above the price channel. The fuel gauge (blue dotted line above; click to enlarge) is confirming a move higher and price has closed above the T3 Tilson for the second day.

A few possible scenarios:

  • CHL can easily continue for some time within the price channel allowing traders to buy at the bottom and sell at the top.

  • Price will resume the previous direction -- which in this case is higher -- and traders can consider placing a buy stop order above the upper range of the channel to capture a price move towards the Fibonacci channel target of $56.30 at the -1.618% extension.

  • Bearish traders can consider using the same scenario as above -- simply revise the trade at the bottom of the trading range.

Summary : CHL continues to remain in the a channel providing channel traders a possible set up. More directional traders can place stop entry orders on either side of the channel looking for the break out.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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