Boston, MA 09/16/2013 (wallstreetpr) – Youku Tudou Inc (ADR) (NYSE:YOKU) (Closed: $26.83, Up: 8.93%) opened flat on Friday and kept trading around the previous day’s closing price most of the session but in the last two hours, it shot up sharply to end the week at the highest level in the last two years. The daily candle created a very bullish long green one. The volume at 11 million was way higher than the average volume of 2.5 million.
The stock, a comparative newcomer, had made its debut in the exchange in December 2010 and opened in $27. After an initial spike to $ and subsequent correction, it quickly rallied to $69.95 in 2011. The bear market for the stock began at that point which brought the stock down all the way to $13.76 in the same year. This level of $13.76 kept being tested for the next two years as the stock made a low at $13.83 in 2011 again and another low at $13.82 in 2012. All the selloffs in the period of 2011 – 2013 found ample demand in the zone of $13.75 – $15.50.
The price action from the 2011 top to the June 2013 low of $17.69 looks like a Double Corrective where the last part of the correction is a Triangle. We get the B-D line by connecting the 2012 top of $32.75 and the 2013 top of $25.24. This line was broken in August 2013 and was tested twice in the same month. On Friday, we got the first convincing close above the upper boundary of the range at $25.60.
The volume pattern shows increasing spikes since April 2013 which suggests accumulation in the lower levels. If this is a successful breakout, then it can achieve the range targets of $35 & $37 in the coming days. The triangle gives us a target of $48.
Investors could buy this stock on all dips for targets of $32.5 and $35.
