LI AUTO INC - ADR is showing promising signs of setting up for a breakout.

Our stockscreener has identified a possible breakout setup on LI AUTO INC - ADR (NASDAQ:LI). This occurs when the stock consolidates following a significant upward movement. While the breakout outcome cannot be guaranteed, it may be worth monitoring NASDAQ:LI for potential opportunities.

Technical analysis of NASDAQ:LI

Every day ChartMill assigns a Technical Rating to every stock. The score ranges from 0 to 10 and is determined by evaluating multiple technical indicators and properties.

Overall LI gets a technical rating of 7 out of 10. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, LI is showing a nice and steady performance.

• The long and short term trends are both positive. This is looking good!
• Looking at the yearly performance, LI did better than 96% of all other stocks.
• LI is one of the better performing stocks in the Automobiles industry, it outperforms 100% of 38 stocks in the same industry.
• LI is currently trading in the upper part of its 52 week range. The S&P500 Index is also trading in the upper part of its 52 week range, so LI is performing more or less in line with the market.
• In the last month LI has a been trading in the 38.21 - 43.37 range, which is quite wide. It is currently trading in the middle of this range where prices have been consolidating recently, this may present a good entry opportunity, but some resistance may be present above.

For an up to date full technical analysis you can check the technical report of LI

How does the Setup look for NASDAQ:LI

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:LI has a 8 as its setup rating, indicating its current consolidation status.

LI has an excellent technical rating and also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is very little resistance above the current price. We notice that large players showed an interest for LI in the last couple of days, which is a good sign.

How can NASDAQ:LI be traded?

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

Every day, new breakout setups can be found on ChartMill in our Breakout screener.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.