Advtech Long Position setup

Not a stock we trade often and in fact, its proving quite difficult to source a product provider for a CFD derivative so we may need to trade the underlying stock on for this one should there be a trigger. Starting off with the weekly chart, we see a strong uptrend in place with the weekly price chart well above the 21 and 89 EMA's. This is also supplemented by an interesting stochastic pattern where the stochastic started to reverse from overbought position but has now crossed back upwards over its signal line in what we refer to as a failed stochastic reversal - a very bullish signal.

The daily chart is equally appealing as well see a price retracement to and upward reversal from around the 61.8% retracement level. At the same time, the daily stochastic is oversold and reversing upwards. Additionally, the stock ended the week painted a big bullish engulfing candle on the daily chart.

The support and resistance chart also illustrates the strong uptrend in place and we can see that price has found support at the strong upward trending support line going back to April 2015. There also appears to be a break out of a triangular-type structure taking place.

The setup for this trade is quite tight given the prices involved but we would look or an entry at around the current price level of R12.25 setting the stop as a close below the last swing low of R12.05 and targeting the structure top at R12.70. This would yield a target reward to risk of 2.25-1. Grading for this trade is at 75%. Worth mentioning that without obtaining a leveraged position for this trade the capital outlay would be quite onerous trading the underlying given the tight stop involved.