Miniso Rockets Ahead With Bullish Momentum - How High Can It Go?

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Photo by Austin Distel on Unsplash
 

Miniso Group Holding Limited (MNSO) is a Chinese low-cost retailer with a wide range of design-led lifestyle products. It specializes in household and consumer goods, including stationery, cosmetics, kitchenware, and toys, and has expanded into global markets, with 4,200 stores across six continents. In 2016, Miniso's sales revenue was $1.5 billion. The company collaborated with Marvel Entertainment in 2019 to sell branded products.

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Miniso MNSO Wyckoff method

MNSO has been in a down trend since June 2021. This carried on for almost a year. On 8 June 2022, a momentum bar coupled with a spike in volume occurred. This was followed by a Wyckoff sign of strength (SOS) rally with a spike of volume to hit around $9. This swing-up was considered as the Wyckoff change of character (CHoC) to transform the downtrend to a potential Wyckoff accumulation phase. The price then retraced back into the trading range, forming a Wyckoff upthrust (UT) that failed to commit above the resistance at $9.

The price ground down to retest the support of $5 several times and it is worth noting that during this period, the volume has been decreasing. This has hallmark characteristics of bullish bias. The SOS rally in early November was the best rally in the last 12 months. It broke out of the $9 resistance on 14 Nov with a spike in volume. The price was able to commit above $9 followed by a minor pull back testing the resistance-turned-support at $9. The bar on 5 Dec came with a localized increase of volume suggesting the presence of supply and the price consolidated in a Wyckoff backup (BU) phase.

The next breakout on 13 Jan 2023 signifies MNSO entering Wyckoff phase E markup. The follow-through price action to rally up continued until it hit around $16.50 which is a long-term resistant line. The bar spreads since the breakout is also narrower with increasing volume together shortening the thrust to the upside. This would suggest exhaustion of the up momentum and profit-taking activities around the $16.50 axis.  
 

Bias

Bullish. According to the Wyckoff method, MNSO has completed an accumulation phase and is now in phase E markup. However, the upcoming earning results and long-term resistance area of $16.50 might cause the price to retest the $14.50 support in the near term. If it can continue to commit above $16.50, the next target would be $20 and $27.

If the price breaks below $14.50, it is likely to retest the support of $13. MNSO was discussed in detail in my weekly live group coaching on 31 Jan 2023 before the market opened. The improving market breadth together with many bullish trade entry setups (MNSO is one of the many) could suggest a new bull run as discussed in the video.


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Disclaimer: The information in this presentation is solely for educational purpose and should not be taken as investment advice.

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