Assuming the short term bullish divergence in the broad market holds up I am thinking that China Agritech Inc. CAGC might possibly get a bounce going expanding into its inverted triangle.
A move higher in China Agritech Inc. after today would put it above the long term bear market down trendline as well and could be considered a break of that downtrend assuming there is wide price spread.
China Agritech Inc. is also sitting at modest long term support. China Agritech Inc. has turned into an absolute sleeper in 2010 while before that it was seemingly the number one Chinese momentum stock.
CAGC has a very slow float and a large short interest in the 25% range right now.
Taking the all time high near the 30 range and the recent low of the low 9 range we can see that CAGC has done a 70% decline. That is a huge correction. It makes sense though since this is such a low float stock, those types of wild swings are to be expected.
So one of two things is going to happen in the days ahead. Either CAGC will get a small short squeeze going to the 14 range or roughly 30% higher from here and fill out this inverted triangle, or it will continue to break down below 9 pushing to new bear market lows.
The odds right now seem to favor an upside push to 14 range.