LI - Overshoot Short

LI has hit my potential SRZ Shakeout Reversal Zone for the overshoot ratios of two 3 pivot Fibonacci extensions (yellow and white trendlines).

This time i've just drawn a blue band without the fibs for a clean chart, but these show the 2 doundaries of the overshoot ratios.

LI has topped a few times in this area and so there will be heavy resistance from sellers and shorts here.

In addition there are 5 BIG gaps in this uptrend and it looks very unstable.

I am staggering into a short here and will hold till the gaps fill.

I will add more if/when i see a bearish candle with upper wick.

Not advice.

Note

Almost engulfing candle on 15 falls back into SRZ, could be some topping shenanigans but mometum is starting to shift and i am adding to my short here and will add again at resistance or on a higher time frame bearish candle

Note

"Chinese EV Maker Li Auto Launches Flagship SUV; Shares Accelerate 7%
Jun 22, 202207:27
Li Auto (2015) unveiled its flagship smart SUV model Li L9 during a virtual launch event yesterday."

Great time for a top so Mr composite can distribute to incoming retailers.

Note

Looking bearish

Note

Looks like a BC Buying Climax into sudden shakeout UT UpThrust

Note

In what is probably a BIG blow off top LI has blasted through my overshoot band and has printed another HUGE gap. I think it is now extremely overextended. I have added to my short. I dont think this can go on much longer with so many gaps.

Note

Also passed long term resistance. May add more on a SRP.

Note

Looking at the chart again it seems my blue band was incorrect and now I think this will be a 1.618 3 pivot extension. Overshoot typical up to 1.786 and more extreme 1.889.

Note

Thats 4 gaps in 5 days now - very wild.

Note

Also the RSI is up at 84 on the daily chart - very close to equalling the highest. I'm adding a little but not much on each gap.

Note

Some bearish momentum coming in here. Sometimes it does appear that overextended stocks become a leading indicator to a index reversal and so we'll see if thats the case here.

Note

If LI breaks 1H 20 MA I say its topped.

Note

LI just needs to fill this gap and it will topple i think.

Note

With indexes falling today LI is getting mashed down 7% and in the end the topping ratio was a fairly obvious (although I didnt see it at first) 2.272

Note

2W candle coming to a close under resistance with huge upper wick

Note

LI has been taking its time and in that time NDX is starting to show signs of reversal so although I think LI will have a big fall I'm looking to buy stocks not short stocks now. I dont want to be short with bullish NDX and so I will look for a graceful exit on this one. Its in a contracting pattern so I think I can exit around long term resistance that may even become support, though I guess the crash regardless of NDX.

Note

I have exited at resistance today. As I said it will probably fall but I dont want to be in any shorts right now when I think NDX is about to pop.

dRends35

Your FA guru can't read a chart💭

I run a technical group with lots of content every day + regular videos, 1:1, chatroom 🚀.

Better than all the rest? My record speaks for itself 💡.

Telegram Group: $50 per month✨.

Contact: t.me/dRends35

Also on:

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.

dRends35

Also on: