China Hongx -- 4th Aug 08

China Hongx closed $0.50 on 1st Aug 08 after hitting an intra-day low of $0.47. Technically, there are a few good signs being observed and perhaps due to the coming Olympics, the price might rally further up in the coming week. Firstly, MACD histogram still in the positive region since 25th Jun 08. MACD signal is at the zero level and show no sign of cutting down. RSI lies in the 50% level showing resilient in the price level and limited downside. Stochastic is about the cut up too. In candlestick formation between 31st Jul to 1st Aug, a bullish engulfing was formed, potentially more upside. China Hongx currently is floating around the 14d EMA level of $0.49 with the 50d EMA level at $0.51 as it immediate resistance. It has tried to break the 61.8% Fibonacci retracement level at $0.535/$0.54 but failed to do so. If this level is able to break and turn into a support, the immediate target would be to filled up the gap and re-test the previous support turn resistance price leve at $0.575/$0.58, which is also the 50% Fibonacci retracement level. China Hongx will be reporting its quarterly earning on 5th Aug 08 and if there is n0 negative result, the chance of re-testing the $0.575/$0.58 level should be high in short-term. The downside risk for China Hongx at the moment will be falling down to re-test its March low level at $0.405. This could potentially materializes if the earning result is worse than market expectation or there is a drop in profit margin.