China Metal Recycling is one of the largest scrap metal recycling companies in China. It purchases scrap steel, scrap copper and other scrap metal from both overseas and domestic suppliers and uses heavy equipment and manual labor to separate the scrap into its various metal components and produces recycled scrap metal products.

China Metal Recycling is an opportunity to buy thanks to its accumulation area. In the short term, investors have a craze for the stock and there were heavy volumes on it.

Even if the security is in a bearish trend in the long term, it has rebounded in the HKD 5.7 support area. This rally left the room for an accumulation area, which led to a consolidation phase between HKD 5.7 and HKD 6.3. Therefore, volatility has brought down but heavy volumes in the last trading sessions might help a new bullish trend.

According to Surperformance rating, the stock meets all criteria for a trading strategy. It is currently trading at 0.14 times revenues for this fiscal year. EPS is estimated at HKD 2.13 for 2012 and HKD 2.83 for 2013 and analysts revised regularly upward.

Both financial elements and graphical pattern give a good entry point to buy China Metal Recycling. The security, thanks to its strong fundamentals, is interesting in a trading strategy to benefit from a bullish trend. The target price is the short term resistance at HKD 7.1 and by extension HKD 8.1. The trading strategy would be invalidated if the stock crosses the HKD 5.7 support so a stop loss can be placed at this level.