2689.HK

As we did some coverage on some HK stocks, we have opened a position in 2689.HK as mentioned earlier in the week.

Previous coverage: Hong Kong stocks

As markets seem to be less optimistic after QE3 has been announced, China has been in the limelight with no expansion (luckily with no contraction) on their manufacturing numbers. It is widely acknowledged that China has to grow at least above 50 PMI to show sustainable results but it has been below 50 (ranging around 46-48) over the past 9 months and SSE is at its 4 years all time low (comparable to 2009's financial crisis).

Nevertheless, HSI has shown pretty strong resilience against the figures from China but it's not showing big movements for penny stocks like 2689.HK. Looking at the charts below:

Trending in between $3.82 - $4.30 for the past 1 week, it didn't had an opportunity to actually break above $4.40 and the 100d MA is showing good resistance for breakout (it touched on 21 Sept). Looking at the stochastics, it is still on the high band and looks like more of a upward movement and notice the 20MA which is going near to the 50MA which signals a potential breakout as well. 

Our target price for this counter is at $4.60 - $4.65 depending on market sentiments and cut price at $3.75. 

Your thoughts?