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Geely Automobile (0175.HK) Technical Outlook

$0174.HK #Geely #HongKong #AutoSales #Stocks #Trading #Markets

Geely Automobile
Ticker: 0175.HK
Price: HKD17.08

Company News

Chinese carmaker Geely plans to use a platform developed with input from Volvo to build new models in Malaysia for its partly owned Proton brand, a strategy that shows how it aims to accelerate its push to become China’s first global auto giant.

The yet-to-be-finalised plans for Proton are just one strand of a Geely project to revamp factories at home and abroad using joint platforms it has been perfecting with Volvo since 2013. Geely bought the Swedish brand 10 years ago for $1.8 billion – a deal that raised its international profile and sent shockwaves through the global auto trade.

From its lowly foundation in 1986 in Taizhou on the east coast as a maker of refrigerator parts, Geely has grown into one of the biggest players in China, the world’s largest auto market accounting for nearly one in every three passenger cars sold around the planet. Geely now sells more than 2 million cars a year across all brands, ranking it not far from the world’s top 10 automakers by unit sales.

The CMA platform in particular will allow Geely and Volvo to design vehicles more quickly and cost-effectively, Li said, providing a technological springboard towards a higher market share at a time when the auto industry must embrace a future featuring electric and autonomously driven transport.

GLOBAL AMBITIONS

Like Geely – an anglicisation of the Chinese word for ‘lucky’ – domestic peers Great Wall Motor and GAC have branched out with their own versions of vehicle platforms, harbouring greater ambitions for selling cars in major Western markets.

But grand plans have previously been delayed, or simply cancelled, amid a lack of practical preparedness, analysts have said, against a backdrop of years of trade tensions between China and the United States that have roiled the global economy. At the same time, attention has been diverted to deal with stalling sales at home as the pace of China’s growth has slowed.

In its pursuit of global automaker status, Hangzhou-based Geely is now holding talks to merge the Volvo Cars business with its Hong Kong-listed Geely Automobile – worth about $22 billion by market value, bigger then famed industry names like Fiat Chrysler Automobile and Nissan Motor .

As well as the 49.9% stake it took in Proton three years ago, the broader Geely group – Zhejiang Geely Holding Group , led by Taizhou-born billionaire Li Shufu – now also comprises a 9.7% stake in Germany’s Daimler AG and a majority stake in British sport car brand Lotus.

And while giants from Toyota Motor Corp to Volkswagen AG and General Motors Co have followed a similar shared platform projects for their respective brands, Geely’s strategy is a first for a Chinese company.

The automaker plans to develop all its future models for the Geely and Lynk & Co brands on CMA or other related product platforms, like BMA. It is also developing a new architecture to accelerate the launch of pure battery electric vehicles with intelligent connectivity functions, said Li, a former Ford engineer.

In addition, Geely wants to shift development of next generations of some popular existing models, like Borui and Emgrand sedans, to those architectures, he said. It takes around 18 months for Geely to significantly change a CMA-based car, versus 24-30 months to do so on a non-CMA-based model.

Using CMA, plant managers can switch production of different models to maintain smooth overall capacity utilisation rates at production lines, said Oskar Falk, the Volvo-trained head at Geely and Volvo’s first joint production site in Taizhou.

The plant already exports Volvo Polestar 2 electric sedans to the United States and Europe, and is preparing to make Volvo’s first battery-powered electric vehicle, Falk said.

Geely also plans to start exporting China-made Lynk & Co 01 SUVs to Europe this year.

Business Summary

Geely Automobile Holdings Limited is an investment holding company principally engaged in automobiles.

The major products include Emgrand electric vehicles (EVs), Emgrand grand luxury (GL), Geely GC9, Vision sports utility vehicles (SUVs), Emgrand grand super (GS), Geely Kingkong Series, Geely Boyue, Geely Panda, Free Cruiser, New Emgrand, Vision Series, among others.

In addition, the Company is also engaged in the production and sale of automobile components.

The Company operates its business mainly in China, Europe, Middle East, Africa, Center and South America. Its subsidiaries include Centurion Industries Limited, Value Century Group Limited, Geely International Limited, Zhejiang Fulin Guorun Automobile Parts & Components Co., Ltd. and Linkstate Overseas Limited, among others.

Price Performance

Relative Valuation

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 19.09.

The projected lower bound is: 15.37.

The projected closing price is: 17.23.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 50.3068. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 60.55. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 18 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 100. This is not a topping or bottoming area. The last signal was a sell 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 16 period(s) ago.

Rex Takasugi – TD Profile

GEELY AUTO closed up 0.340 at 17.100. Volume was 73% below average (consolidating) and Bollinger Bands were 35% narrower than normal.

Open     High     Low      Close      Volume
16.900   17.280   16.900   17.100     22,674,556
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bullish
Long Term:         Bullish
Moving Averages: 10-period     50-period      200-period
Close:           16.75         14.58          13.92
Volatility:      28            77             63
Volume:          58,014,076    107,618,616    64,333,212

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

GEELY AUTO is currently 22.9% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future.

Our volume indicators reflect volume flowing into and out of 0175.HK at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on 0175.HK and have had this outlook for the last 31 periods.

HEFFXhttp://www.heffx.com
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

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