I have continued to watch the same couple companies this week which I believe have strong fundamentals and technicals, CEU & DCP. CEU, or Chinese Education Alliance, has fantastic fundamentals that I discussed in more depth in my previous post. Also, from the technical standpoint, the price has reached a 4-month long support level at around $5.30. However, CEU has formed a bearish neckline candlestick formation, which suggests that the current downtrend is still in effect. It thus becomes important to wait for the bounce of the support to indicate a buy signal. Patience is once again found to be quite important. DCP has slightly less strong fundamentals, but good ratings and strong fundamentals nonetheless. It bounced off 19-month support at around 10. It has broken above the downward trendline. The down volume on down weeks of the current downtrend in price have had declining volume while the up weeks of the current down trend have had ascending volume. Also, this week the chart formed a bullish harami candlestick formation, suggesting that the price has bottomed.
Disclosure: I am long DCP