BZUN Stock: Perfectly Aligned for Further Gains
I stumbled upon Baozun Inc (ADR) (NASDAQ: BZUN) stock in June 2017, and it was the focus of my publication titled “Baozun Stock Is Perfectly Aligned for Further Gains.” Those words have proven to be true; since that date, Baozun stock has appreciated to the tune of 58.72%.
The method of analysis that was responsible for producing this insightful and accurate view was technical analysis. This method is predicated on the notion that historical data found on a company’s stock chart can be used as a looking glass into the future. This may seem like a silly ideology, but I have been studying and applying this method for nearly two decades, and the outstanding results are why I continue to use it.
I am focusing on BZUN stock once again because the indications on the company’s stock chart continue to suggest that the path of least resistance is geared toward higher prices and that, therefore, higher prices are likely to prevail.
The following stock chart illustrates the indications that have created this bullish view.
Chart courtesy of StockCharts.com
The BZUN stock chart illustrates an exquisite bullish trend that began its development in early spring of 2016. This bullish uptrend contains the quintessential characteristic that defines all bullish trends—a series of higher highs and higher lows—which was responsible for moving the Baozun stock price from a low of $4.83 to a high of $40.29 over a two-year time frame.
This bullish trend is easily captured using a simple uptrend line. This uptrend line was created by connecting the series of higher lows that defined this bullish trend. The uptrend line not only defines the bullish trend; it acts as a level of price support. The number of points of contact are a testament to its significance. I feel confident in saying that, as long as the BZUN stock price is trading above this uptrend line, the bullish trend is intact and, therefore, higher prices are in development.
The sequence of higher highs and lows have been in lockstep with the moving average convergence/divergence (MACD) indicator. MACD is a momentum indicator which uses the crossing of signal lines in order to distinguish whether bullish or bearish momentum is influencing the price action in a stock. This information is very pertinent because, in order to sustain a move toward higher or lower Baozun stock prices, the applicable momentum is required.
The bullish trend toward higher prices began with a bullish MACD cross, and every correction along the uptrend line was confirmed by a bearish MACD cross.
The uptrend line was just tested, the MACD indicator is converging, and a bullish cross is likely to be generated in the days ahead. This would mark the third bullish MACD cross along this bullish trend. Each and every time a bullish MACD cross was generated, the Baozun stock price appreciated by a considerable sum, and I have to believe that a similar outcome is currently on the horizon.
A bullish MACD cross and a close above $40.25 will confirm the notion that higher BZUN stock prices are in development.
Being bullish on Baozun stock has proven to be a fruitful endeavor. The method of analysis that was responsible for suggesting that a bullish view was warranted continues to suggest that higher BZUN stock prices are on the horizon. So, as a result, I will maintain my bullish view on this investment until there are indications suggesting otherwise.