Date: October 3, 2024
Broker: CGS International
Company Overview
New World Development Co Ltd (Stock code: 17) is a diversified conglomerate that develops and invests in properties through its subsidiaries. The company also provides contracting, property management, and transportation services. Additionally, it operates businesses in infrastructure, telecommunication services, department stores, hotels, restaurants, media, and technology.
Stock Analysis
New World Development has recently experienced a significant technical breakout, signaling a potential upside. The company has broken through a downtrend line, confirmed by a breakaway gap on September 27, 2024. This movement was supported by a surge in volume, further reinforcing the bullish trend.
Technical Indicators
- 23-Period Rate of Change: Rising sharply above the zero line, confirming the momentum and bullish divergence.
- Directional Movement Index: Shows a resurgence of bullish strength as both the ADX and DM+ are rising.
- Stochastic Oscillator: Indicates an oversold crossover, supporting the potential for upside movement.
- MACD: A long-term crossover occurred at the bottom, with the MACD histogram turning positive.
- Volume: The volume has surged over the past ten periods, further confirming the bullish outlook.
Price Action and Targets
- Entry Price(s): HK$10.60, HK$8.60, HK$7.40
- Support Levels:
- Support 1: HK$8.43
- Support 2: HK$6.82
- Stop Loss: HK$5.70
- Resistance Levels:
- Resistance 1: HK$13.78
- Resistance 2: HK$16.32
- Target Prices:
- Target 1: HK$13.45
- Target 2: HK$16.50
- Target 3: HK$20.40
- Target 4: HK$24.50
Investment Recommendation
Traders are advised to buy at the current spot price of HK$10.56 or accumulate on pullbacks to HK$8.60 or HK$7.40. The stop loss is set at HK$5.70. Upon reaching Target Price 1 (HK$13.45), traders are recommended to shift the stop loss to breakeven. The long-term target is set as high as HK$24.50, indicating a significant potential upside.
This detailed technical analysis suggests that New World Development Co Ltd is on a strong bullish trajectory, supported by robust technical indicators and rising trading volumes.
