Timeframes

Some of these China ADRs are amazing.  The can seem so intimidating because almost every day is a gap.  On top of that, they MOVE.  Let's take a look at a real time example in a China coal stock YZC.

I'm bringing this name up because the coals, steels, miners etc are actually showing signs of life and there could be some more big wins to be had in the space.

First let's check out the daily chart.  What a run it's had in the last couple of weeks.  It appears so extended short term.  Also notice the volume.  Given we're at a resistance level, maybe we can catch a consolidation entry sometime in the next week or two.

Now let's zoom out to the weekly.  In reality, this recent two week move is NOTHING.  We could actually make the case that a 'crummy' bounce could lead shares up to 13-14.  I'd also just like to point out how compressed price really had been before the breakout.

No matter how we look at it, the daily chart is going to be stretched for awhile.  If we want to take a long here...we kind of just have to accept that is the type of action that occurs early in a big move.

I'll leave you with a few final thoughts
- throw out the daily bollinger bands in situations like this
- buying here or a shallower consolidation/pullback is fine if necessary
- if a sharper pull in occurs don't like volatility deter you in a pullback.

Thanks for reading!