Kandi Technologies Group Inc (NASDAQ: KNDI)

Kandi Technologies Group, Inc., through its subsidiaries, designs, develops, manufactures, and commercializes various vehicles. It offers electrical vehicles, all-terrain vehicles, go-karts, and specialized automobiles; and utility vehicles, three-wheeled motorcycles, refitted cars, and various auto generators. Kandi Technologies Group, Inc. sells its products to exporters, importers, distributors, dealers, and business partners in North America, Europe, and China. The company was formerly known as Kandi Technologies, Corp. and changed its name to Kandi Technologies Group, Inc. in December 2012.

Take a look at the 1-year chart of Kandi (Nasdaq: KNDI) with added notations:

1-year chart of Kandi (Nasdaq: KNDI)

KNDI started from a low at $4 back in August, rallied to a high of $22 in March, and eventually fell down to $11 in April and May. Since that time, the stock has rallied back up to the $22 resistance (red) and appears to have now completely formed the cup (blue) and handle (purple) of a cup and handle pattern.

A break through the down trending resistance (green) should be the first sign that the stock is heading towards a breakout through $22

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The Tale of the Tape: KNDI has formed a C&H pattern. A long trade could be entered on a break above the trendline resistance (currently near $20), or on a breakout above the $22 level, with a stop placed under the point of entry.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach